Increasing tobacco taxes is an easy win. Here is an excellent podcast addressing this issue:
http://www.cgdev.org/blog/tobacco-epidemic-%E2%80%93-bill-savedoff
Jamie
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Myanmar gears up to control tobacco products market
According to a workshop meeting on taxation of cigarettes and tobacco products, Myanmar taxes manufacturers only based on products’ factory value, resulting in tax evasion and low tax rates for duty-free factories.
Myanmar’s taxation of tobacco products started in the colonial era in the form of the Cigarettes Duty Act in 1931 and has continued since then under the profit tax law, general sales tax law, sales tax law, income tax law, goods and services tax law, trade tax law and Union tax law.
“This year saw the cigarette tax rate rise from 100 per cent to 120 per cent under the Union tax law. Taxes on other tobacco products were raised from 50 to 60 per cent. But even though the taxes are getting higher, they are still based on the factory value of the products, unlike other countries, where taxes are based on market prices. The factory values have been found to be too low,” said Dr Kyaw Soe from People’s Health Foundation.
He continued: “Recently, we wanted to find out how many types of cigarettes there are at supermarkets and bought a total of 30 different brands. Think of the magnitude of the fact that you can get around 30 different types of cigarettes from a supermarket. Some only cost around Ks 300 per box, which comes with 20 cigarettes inside, which is only around the price of a cup of tea. So the 20 per cent increase is miniscule when you look at the situation.”
Based on data compiled by Myanmar’s Medical Research Department, Myanmar has a high rate of oral cavity cancer, which is one of the most common cancer in Asean countries.
Tobacco products, including cigarettes and betel nut, are the primary causes of oral cavity cancer, according to the Department of Public Health. The government is working on by-laws to educate and protect citizens from the effects of such habits.
“In Myanmar, apart from cigarettes, there is heavy consumption of betel nuts for chewing. According to the tax rates for shops, only when income rises above 10 lakhs (about US$800) annually do shops have to pay taxes on these products. While it seems like the tax laws are getting stricter, some stalls are earning up to three lakhs per day, though most of them deny earning that much. There has been a large increase in consumers as well as sellers, and since there is no strict control, the rates of oral cancer and uncleanliness are rising. These are the reasons for the drive to add to and edit the law regarding cigarettes and tobacco products,” added Dr Kyaw Soe.
Currently, Myanmar ranks first in betel nut chewing worldwide.
It is estimated that there are around 291 billion illegal cigarettes in circulation within the Asean region.
http://elevenmyanmar.com/local/myanmar-gears-control-tobacco-products-market
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Health groups call for higher tobacco tax
By Shwe Yee Saw Myint | Tuesday, 22 September 2015
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Raising taxes on tobacco products is one of the most effective ways to reduce consumption and save lives, but even though taxes in Myanmar are relatively high, the lack of enforcement and low costs of local production mean business is booming.
A Yangon vendor shows packages of foreign cigarettes that lack the tax import stamp. Photo: Thiri Lu / The Myanmar TimesA Yangon vendor shows packages of foreign cigarettes that lack the tax import stamp. Photo: Thiri Lu / The Myanmar Times
Developed countries where cigarette tariffs are high have seen sharp falls in the numbers of smokers – for example from 51 percent of men in the UK in 1974 to 22pc in 2013. Nationwide data in Myanmar is still being compiled, but Myanmar Survey Research found in 2012 that 30pc of males in Yangon and Mandalay were cigarette smokers, while an additional 15pc also smoked traditional cheroots. Sample surveys in 1999-2000 suggested even higher figures, with up to 60pc of men smoking.
Dr Kyaw Soe, program coordinator for the People’s Health Foundation, an NGO promoting universal healthcare, said that although the government had imposed a total ban this year on cigarette imports, there was still an “alarming expansion” in consumption because of low domestic prices and inadequate taxation policies.
“Within ASEAN, our country still needs to reduce consumption of tobacco through taxes. We have urged the Ministry of Commerce and the Ministry of Health to increase tobacco taxation and we need the ministers’ decision,” he said, speaking at a regional workshop on Tobacco Taxation in Asian Countries in Yangon last week.
According to the latest Union Taxation Law, taxes on alcohol and tobacco products are on a list of 16 special categories that will see taxes raised from 100 to 120pc in the current 2015-16 fiscal year.
Tobacco companies are supposed to pay taxes on their products in advance for the whole year. The total declared number of packs of cigarettes to be produced in the 2014-15 financial year was about 462 million, up 27pc from the year before.
But law and practice are two different matters. Despite the ban on cigarette imports – except for duty-free shops – many foreign-made brands are widely available in stores. There is also no limit on the import of Virginia tobacco and other raw materials used in local production.
Three state-owned cigarette factories produced a few brands of filtered and non-filtered cigarettes up until the early 1990s. Economic liberalisation policies launched in 1992 led to a flurry of joint ventures with foreign tobacco companies, including Morris International, British Tobacco, American Cigarette Company, Benson and Hedges, Dunhill, and companies from Japan, South Korea and China.
Local industries are owned by such national economic giants as Myanmar Economic Holding, Myanmar Economic Corporation, Htoo Group and Fu Xing Brothers Group. The ministry of industry also set up cigarette production facilities.
The original motive of these joint-venture companies was to produce for export, but their products have flooded the domestic market instead.
Dr Thuzarchit Tin, director of the public health department, noted that their budget for anti-smoking campaigns had not benefited from the increase in state tobacco revenues, while smoking continued to be the main cause of lung cancer, and also a cause of oral cancer. Around one-fifth of the cancers diagnosed in Myanmar are oral, according to the World Health Organization.
Taxes in Myanmar are levied on the factory-set price of a pack of cigarettes which for cheaper local brands, such as the popular Red Ruby, can range from just K60 to K440 (about US$0.05 to $0.34) a pack. These then go on to be retailed from K250 to K800.
And on the street, it is clear from the missing tax stamps that many packs clear the factory gate with no tax paid at all.
In addition, the use of traditional tobacco products, such as cheroots and betel quid, remains very high, again reflecting low costs and the challenge of tax collection from the informal sector.
Tax revenues for the three tobacco products have increased annually from 2009 to 2014. Taxes collected on cigarettes in fiscal year 2013-14 contributed nearly K31 billion ($24 million at current exchange rates) to government coffers.
http://www.mmtimes.com/index.php/national-news/16590-health-groups-call-for-higher-tobacco-tax.html
