Finally, if a global tobacco tax is pursued or instituted this week, it could well have negative effects where signatory state finances and efforts to persuade the majority of smokers to quit, are threatened.
Evidence shows that when tobacco taxes surge, though some smokers do quit, many others simply switch to counterfeit or illicit cigarettes, which are sold on the black market and are therefore not subject to the tax.
A recent study by industrial group Concamin confirmed that this occurred following Mexico’s introduction of a cigarette tax increase that went into effect in 2011. According to that study, illegal, untaxed cigarettes now account for about 17 percent of cigarettes sold in Mexico – a number that risks sapping the state of resources it depends on to finance initiatives including with regard to public health, and which indicates that while revenue from cigarette sales has declined, actual smoking has not diminished commensurate with the decrease. Studies from individual US states where tobacco tax increases have been pursued as a budget and public health panacea have demonstrated similar effects.
That trend is a bad one, both for governments and for smokers, who would benefit from giving up the habit. Red flags about the proposal have already been raised, especially in countries like Pakistan, where a large amount of government spending on programs other than smoking cessation are being financed through taxes levied on legally purchased tobacco products.
Yet the WHO disregards this evidence in its single-minded pursuit of a more durable funding line that cannot be meddled with by UN member-states who wish to hold the organization accountable and preserve control over their fiscal and public health policies.
At this week’s meeting, FCTC signatories should reject proposals that would institute a global tobacco tax, whether by the front or the back door and demand that the WHO stop its pursuit of top-down fiscal policy-making.
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