Budget must increase taxes levied on tobacco

Budget must increase taxes levied on tobacco

Whether it be the Commonwealth Heads of Government Meeting, the creation of yet more districts, or Universal Secondary Education, there seems no end to the many and varied demands being made on the Ugandan government’s limited revenue base. It takes a brave person to be Minister of Finance.

So, we take this opportunity, on the World Health Organisation’s “World No Tobacco Day”, to remind Mr Ezra Suruma that he can reduce the growing gap between government expenditure and government revenue by increasing excise duty on cigarettes, which would at the same time reduce smoking-related deaths and illnesses, thereby increasing Ugandan life expectancy.

This tax increase would indeed be a marriage made in heaven between the Ministries of Finance and Health. So, we wonder why Mr Suruma has taken so long to implement such an obviously welcome measure.

We trust that his forthcoming budget will make amends by including a substantial increase in tobacco excise duty. And he will have a very strong argument to make his case to the tobacco companies if one can recall that in last year’s budget, taxes were increased on mineral water but not on cigarettes. The contradiction therein is blatantly apparent.

That the forthcoming budget should be tough on tobacco receives added support from two quarters. Firstly, Vice President Bukenya, in a recent visit to West Nile, said that tobacco growing should be abandoned in favour of other cash crops, as tobacco had made the people poorer.

Secondly the Ugandan Cabinet has supported the WHO’s Framework Convention on Tobacco Control (FCTC), and the country’s formal ratification will take place very shortly. The FCTC is the world’s first global public health treaty.

It aims to protect present and future generations from the devastating health, social, environmental and economic consequences of tobacco through comprehensive tobacco advertising bans, price and tax increases, big graphic health warning labels on tobacco products, measures to protect people from secondhand smoke and alternative crops for tobacco farmers.

Kenya, long ago, and Tanzania, recently, have ratified the FCTC, so it is a straightforward matter for tax policies to be harmonised within the East African Community and achieve a goal of the FCTC – regular and substantial increases in tobacco taxation.

So, on budget day we shall be expecting to hear good news from Mr Suruma; we expect you to increase excise duty on cigarettes.

Online at: http://www.monitor.co.ug/oped/oped05311.php