Beware ASEAN Excise Tax Reform manual, warns SEATCA
South-East Asian governments should be wary of recommendations in the ASEAN Excise Tax Reform manual, warns an FCA member organisation.
Released by the International Trade and Investment Centre (ITIC), the manual promotes the interests of the tobacco industry and should not be considered a tool to help governments, says the Southeast Asia Tobacco Control Alliance (SEATCA).
SEATCA’s Tobacco Tax Program Manager Sophapan Ratanachena said the manual was not to be trusted because transnational tobacco companies funded and provided data for it.
“A tobacco tax roadmap developed in collaboration with the tobacco industry is a dangerous proposition for both tax revenue and public health,” she said.
“It is important that governments protect their public health policies, including tobacco taxation, from commercial and other vested interests of the tobacco industry.”
An academic review of the manual’s section on tobacco taxation reveals contradictions and inconsistencies when compared to international best practices and recommendations in Article 6 of the WHO Framework Convention on Tobacco Control (FCTC).
University of Cape Town Professor Hana Ross said that on the surface the manual and FCTC guidelines seemed to align on some issues. “However, the main principles and views that the manual promotes often contradict its analysis and recommendations,” she said.
“It also runs contrary to international best practices on tobacco taxation outlined in the Article 6 Guidelines.”
The manual’s main faults are:
- It fails to acknowledge the evidence and recommendations to reduce tobacco demand in FCTC Article 6 guidelines;
- It states that Indonesia is an example of a country with high taxes that drive illicit trade. But in another document, the ITIC claims Indonesia has the lowest penetration of illicit tobacco products in the region;
- The manual warns against substantial tobacco tax increases, even if some countries in the ASEAN region and many others globally have successfully increased tax to reduce tobacco use while also boosting their tax revenues;
- Cigarette affordability is driven by tobacco taxes and also by industry-set prices, which the manual conveniently does not address;
- Its very strong opposition to tobacco tax earmarking contrasts sharply with recommendations in Article 6 guidelines;
- The manual falsely claims that the tobacco industry’s system of tracking and tracing tobacco products (Codentify) is compliant with the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products.