Tobacco Taxes Rising Worldwide

March 15, 2010 Taxation in New ZealandTaxation in UKTaxation in USATaxation in Vietnam

cigaretteAccording to numerous political and anti-tobacco activists worldwide, taxes on cigarettes and tobacco products should be increased to raise Government revenues and deter smoking.

Several anti-smoking organizations across the world have released new reports claiming that a fresh round of tax increases needs to be seen on tobacco products, and Government officials across New Zealand, several US states, Vietnam and the UK are looking set to oblige. Although, the governments and anti-smoking groups are fighting for differing causes, with Governments citing budgetary shortfalls and the need for increased revenues as the reason for tax rises.

The Kansas Senate Taxation committee announced on March 10th that it had heard arguments in favor of increasing tobacco taxation by an equivalent of USD 0.55 per pack of cigarettes, and will vote on the proposal by March 19th. The increased measure would bring the state’s taxation levels in line with the US national average of USD1.34 per pack. Supporters of the increase claim that it would raise an extra USD69 million annually. On March 11th the US Senate passed the Prevent All Cigarette Trafficking Act (PACT), which bans the remote sale of tobacco products. The act aims to clamp down on tobacco-tax evasion by reducing mis-documentation or non-reporting of tobacco sales. Scott Ramminger, spokesperson for the Coalition to Stop Contraband Tobacco, has hailed the vote as “…a huge victory for American taxpayers, American small business owners and America’s youth.” On the same day, Gary Herbert, Governor of Utah, announced that he will not veto a bill which would see an USD 1 increase per pack of cigarettes, despite his campaign promise of no tax increases.

In New Zealand, Tariana Turia, co-leader of the Maori Party and Associate Health Minister of New Zealand, revealed on March 12th that she intends to request the New Zealand Members of Parliament to approve a series of tax increases, which will see the price of a packet of cigarettes rise by 20 percent for the next five years. While she has indicated that her ultimate goal is to see the outright ban of cigarettes sales, the newest proposal is aimed at making smoking cost-prohibitive among national youths.

In the UK, the anti-smoking charity Action on Smoking and Health (ASH) has sent a proposal to the Government to increase tobacco taxes by an extra 5 percent. The group claims that their suggestion would see 190 000 UK citizens stop smoking, and an approximated £20 million saved in the health-sector.

Similarly, in Vietnam the national representative of the World Health Organization has recommended a 20 percent increase in tobacco taxes, which would raise an estimated VND1.9 trillion (US$101.7 million) per annum. It is also expected that the action would see a 300 000 person decrease in smoking.

Photo by lanier67