UN praises tax hikes to limit tobacco use

Turkey has increased its fight against tobacco use in recent years, adopting smoke-free zones since 2009 and raising taxes in 2011

UN praises tax hikes to limit tobacco use

World Bulletin/News Desk

The World Health Organization on its No Tobacco Day - observed since 1989 and celebrated internationally on May 31 - urges governments around the world to raise taxes on tobacco products, hailing the method as the ‘most cost-effective’ way of tobacco control.

A move Turkey has embraced, albeit with certain unwanted consequences, as research shows it cuts the number of smokers by 4 percent in developed nations, and by twice that number in developing ones, the United Nations affiliate group says.

The World Health Organization says that a tax increase resulting in a 10-percent rise in tobacco prices lowers consumption by about 4% in high-income countries and by up to 8% in most low and middle income countries. That number exceeds ten percent among young and poor demographics.

“We and the World Health Organization regard the global tobacco sector as an international ring that commits crimes against humanity, says Ihsan Karaman, President of anti-addiction group Turkish Green Crescent Society. Any harm on the tobacco sector would be beneficial for humanity. The economy would not receive much impact.”

Turkey, a signatory to the UN’s framework convention on tobacco control, has increased its fight against tobacco use in recent years, adopting smoke-free zones since 2009 and raising taxes in 2011.

Before the most recent tax rate of 65 percent achieved in 2011, Turkey had raised the tax on tobacco products from 58 to 63 percent in 2010. Research indicates that the hike led to a drop of more than 3 percent in the number of smokers, saving an estimated 340,000 lives among current and would-be smokers.

In line with the World Health Organization’s goals, Turkey might resort to the same method again, says Ihsan Karaman.

“It’s about the government taking risks, he adds. This government can implement it, given that it has the World Health Organization’s support. The Prime minister [Recep Tayyip Erdogan] has received an award in this regard.”

Director-General of WHO Margaret Chan had presented "The Special Prestige Award of Global Smoking Control" to Erdogan for Turkey's success in tobacco control on "May 31 World No Tobacco Day" in 2013.

In October 2011, however, the tax rate was raised from 63 to 69 percent, only to be brought back down to 65 percent two weeks later. The latter move was considered to be the result of fears that the higher rate would engender inflation spikes.

As far as the possible impact on the Turkish economy and tobacco sector, Karaman argues that tax increases are still a good move.

“The [World Health Organization’s] goal is to reduce the number of tobacco users by way of decreasing availability, argues Karaman. And the best way to do this is through price hikes and changes in marketing.”

But Professor Mensure Kolcak of Ataturk University says the economic deterrence of tax rises would only go so far before it becomes self-defeating.

Kolcak allows for the fact that raising taxes is a proven way to target smoking, but he argues that it is far from sufficient on its own, in the absence of other measures, and could even be dispensed with if economic indicators suggest it is futile.

“Higher prices have been proven to encourage people to quit smoking and discourage young adults to take it up, so raising taxes is accepted as an efficient method in the fight against smoking. And it is also likely to yield higher tax revenue, Kolcak says. But if we bring down production by raising taxes and fail to reduce demand, then this would lead to higher prices and a larger black market.”

Kolcak argues that triggering more widespread black market activity, running the additional risk of spurring inflation rates, and ending up failing to achieve the socio-economic benefits tax rises are made to entail, are reason enough to reconsider them.

“Independent research tells us that one out of five packs of cigarettes in Turkey is brought in illegally, with this figure rising to one in two in the southeastern region, adds Kolcak. These results indicate that economic limits on tobacco products have been reached in Turkey.”

Still, according to Kolcak, Turkey’s tax rate on tobacco adds up to 80 percent of the retail price, in line with the tax rate in European Union member countries, with the highest being in the UK at 90 percent and the lowest in Luxembourg at 70 percent.

The World Health Organization says tobacco use is the leading preventable cause of death, killing nearly six million people each year. Ten percent of those deaths occur because of exposure to second-hand smoke.

Tobacco use is set to kill more than eight million people by 2030. Approximately 80% of the deaths will occur in low and middle income countries, the group says.

Last Mod: 31 Mayıs 2014, 11:49
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