SEATCA Urges Southeast Asian Nations to Improve Tobacco Tax Policy

Four countries in the Association of Southeast Asian Nations (ASEAN) – namely Cambodia, Indonesia, Myanmar, and Vietnam – could have collected an additional $4.81 billion in tax revenue over the last two years and prevented more than 1.3 million premature deaths, if they had had an effective tobacco tax policy in place, claims a recent study released by the Southeast Asia Tobacco Control Alliance (SEATCA).

SEATCA, which is working on accelerating effective implementation of the World Health Organisation Framework Convention on Tobacco Control (WHO FCTC) in the ASEAN region, released these findings during a webinar in July.

Entitled ‘Lost Funds: A Study on the Tobacco Tax Revenue Gap in selected ASEAN countries’, the findings revealed that governments are missing out on collecting a substantial amount of tobacco tax revenue because of a failure to raise tobacco taxes to recommended levels, simplify complex tax structures, and remove tax benefits to tobacco companies. The study cited tobacco industry interference as one of the key obstacles in achieving higher excise tax revenue across the region.

According to the study, the industry publicises exaggerated illicit trade data, falsely predicts economic disasters, and co-opts high profile allies to discourage tax increases. Policymakers and politicians need to be aware of these industry efforts and protect the public interest from industry interference.

In the ASEAN region, which is home to 122 million smokers, the tobacco industry is thwarting tax increases to keep cigarette prices low, obtaining delays in paying taxes, offering promotions to customers, and providing charitable contributions to resource-starved governments to earn political favours.

‘Governments should simplify their tax system and aim to increase tobacco taxes to boost public health and make up for the revenue loss. Sanctions should also be increased and implemented accordingly to deter and address tax evasions by the tobacco industry,’ highlighted Dr Hana Ross, Principal Research Officer of the Research on Economics of Excisable Products (REEP). Dr Ross is the author of the study.