Going up in smoke?

Thursday, 3 November 2011 00:00 - - {{hitsCtrl.values.hits}}

It is said that one person dies every seven minutes from a smoking-related disease. Stark as this little factoid is, it serves to heighten the case of taxation of cigarettes in Sri Lanka, but also questions the strategy followed by the Government.

Latest data by Verite Research shows that the Government, despite its dedication to stamp out smoking, has in fact not increased prices parallel to the per capita income of the country. As a middle income country with US$ 1,200 per capita income, it is possible to increase more taxes on cigarettes.

The other aspect is that even though the Government has been zealous in increasing taxes, it has not been across the board. During the recent Rs. 2 hike, Government regulations did not cover low cost brands such as Three Roses that are freely available, especially to the low income population. Low standard cigarettes are also the most harmful as they have no filter and often come with low quality tobacco.

This means that while the Government could earn Rs. 16 billion in estimated tax increases based on the current 4.2 billion cigarette consumption rate, it still cannot prevent social and health issues of poor people. In addition, smokers who buy average quality cigarettes can easily switch to the lower brand when taxes are increased and thereby maintain the consumption levels.

According to smoking facts, tobacco in a cigarette consists of more than 400 toxic substances and 4,000 chemical compounds. Out of them, the most hazardous substances are tar, which is a carcinogen substance, nicotine that increases cholesterol levels in the body and carbon monoxide, which decreases the amount of oxygen within the body. Nicotine is the most addictive substance in tobacco.

Smoking decreases the levels of oxygen reaching tissues, giving rise to different health problems such as stroke, heart attack or miscarriage. It increases cholesterol levels in the blood, increasing the risk of heart attack. Smoking causes damage and constriction of blood vessels, leading to various diseases of blood vessels. Smoking also causes chronic coughing, shortness of breath, premature ageing, recurrent infections and reduced overall fitness. Smoking-related deaths are mainly because of heart diseases, cancers and chronic obstructive pulmonary disease.

So while the Government can raise income it can also reduce healthcare costs from increased taxation. Surely a win-win situation but this must remain balanced by other awareness measures as well. It is impossible to credit taxation alone as being the sole reason why consumption patterns are slowing down in Sri Lanka. In fact teenage smoking in Sri Lanka is among the lowest in the world and only around 10% of adult males smoke, showing a clear decrease in statistics because awareness and empowerment has made a difference.

So not only must the Government increase taxes reasonable across all brands, it must also use the money earned wisely. Annually the Government earns around Rs. 30 billion from cigarettes, second only to liquor income, but whether this is used for the benefit of the people remains a question. It must be stressed that the sustainable solution to smoking lies in educating people and empowering them to make better choices and not merely in suppressing the industry.