Tax and Health Promotion
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Transcript of Tax and Health Promotion
2007 Johns Hopkins Bloomberg School of Public Health
Tax and Health PromotionTax and Health Promotion
Bungon RitthiphakdeeSoutheast Asia Tobacco Control Alliance (SEATCA) Action on Smoking and Health (ASH) Thailand
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Learning Objective
Learn how to advocate for tobacco tax policy based on Thailand’s experiences
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Taxation: The Most Effective Tobacco Control Measure
World Bank report, Curbing the Epidemic (1999) Found that higher tobacco taxes:
Induce quitting Reduce consumption Prevent starting
World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) Article 6 (2003): “The parties recognize that price and tax
measures are an effective and important means of reducing tobacco consumption by various segments of the population, in particular, young persons.”
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Reluctance to Increase Tobacco Taxes
Do not know or are uncertain about the benefit of a tax increase (true or pretended)
Listen to common arguments against tax increases Government may loose income Smuggling may increase
Concern about political popularity Hurt smokers, especially the poor
Influence from the tobacco industry
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Tobacco Industries Know Taxation Is Effective
“A price increase can cause a decline in the number of people who use the product or in the amount of the product its users consume. Usually it works both ways … both by increasing the number of smokers who quit and decreasing the number of young people who begin to smoke.”
— Philip Morris, 1982
Source: Philip Morris Internal Documents. (1982).
2007 Johns Hopkins Bloomberg School of Public Health
Section ASection A
Where to Start?
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Key Questions to Answer
What is the tobacco tax system in your country? How is tobacco taxed? What is the percentage of the excise tax to
the retail price? Which organization is in charge of tax
decisions and collections?
What evidence is needed to move tax policy in your country?
Who are the experts in your country? Experts can help generate local evidence and
make predictions
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Source: Chaloupka et al. (2000).
Evidence: World Bank Report
A 10% price increase reduces demand by: Four percent in high-income
countries Eight percent in low- or
middle-income countries Long-term effects may be
greater
Young people and the poor are the most price responsive
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Image source: Lung Health Image Library. (2007).
What Is the Impact on Poor Smokers?
Poor smokers tend to spend a higher proportion of their income on tobacco
How do they react to a tax or price increase? More likely to quit or reduce
consumption, which will improve health and release income for other uses
Increased tax revenue can be used to benefit the poor
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Translate World Bank Estimation to a Local Context
Potential health benefits of a 10% increase in the real price of tobacco through taxation in Thailand would: Lead to a 10% decrease in adolescent smoking Prevent 75,400 current youth (15- to 19-year-
olds) from taking up smoking Prevent 9,425 future deaths of today’s Thai
adolescents
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Developing Your Advocacy Plan: Key Questions
What do you want to achieve?
Who can make it happen?
What do they want to hear?
Who are your messengers?
How do you communicate your evidence?
Who are your allies?
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What Do You Want to Propose?
Tobacco tax increase Be specific: How
much of a tobacco tax increase do you want?
Have a very clear policy proposal
Clear
policy
proposal
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Source: Kinh et al. (2006).
How High Should Tobacco Taxes Be?
A comparison with international practice Two-thirds to three-quarters of retail price
A comparison with that of countries with similar level of development Consider how far a country may be below or
above the international standard
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Who Can Make It Happen?
Cabinet
National assembly or parliament
Ministry of finance Key gatekeeper to tobacco tax policy
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What Do They Want to Hear?
Develop a strong, country-specific message that includes: How a tobacco tax increase is good for the
country and good for them (policy maker/politician)
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Who Are Your Messengers?
Minister of health
Tax experts or health economists, both local and international
Tobacco control champions
WHO
World Bank
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Communicate Effectively with Policy Makers
Prepare tax increase proposal by working closely with: Minister of health Economists
Submit tax proposal to: Cabinet Health minister Finance minister Media
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Key Content of Tax Proposal
Why tobacco tax policy is needed
Best practices on tax policy (FCTC/The World Bank)
Country situation How low tobacco tax/cigarette price is in your
country Burden from tobacco use
Recommendation How much tax should be increased? Projection of sale and income
Answer arguments from tobacco industry and policy makers
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Source: Excise Department, Ministry of Finance, Thailand.
Projected Effect of Tax Increase, Thailand
1992 1994
Tax as percent of retail price
55% 61% 63%
Sales in millions of packs 2,035 2,094 2,094
Revenue in millions of baht(If tax is not increased)
15,43819,000(17,000)
21,400(17,000)
Decrease in youth smoking — 200,000 300,000
Option I Option II
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Two Policy Options
Keep the tax low Sell more cigarettes Revenue increases slowly Number of smokers increases, especially among
youth
Increase the tax Cigarette sales do not increase Big increase in revenue Number of smokers decreases, especially among
youth
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*Source: Telephone poll. (1982).
Conduct Public Opinion Poll
Amount of people supporting tax increase*: Over 80% of nonsmokers 65% of smokers Overall, 70% support tax increases
Communicate effectively with policy makers Once they know that the majority of the public
supports the policy, they are more comfortable implementing the policy
Well-planned media advocacy Identify potential media or journalist Release of opinion poll prior to cabinet
meeting
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Thai Cabinet Resolution in 1993
Increase excise tax from 55% to 60%
Plus regular increases with inflation
Cigarette price rose from 15 to 18 baht (for a popular domestic brand)