2007 johns hopkins bloomberg school of public health tax and health promotion bungon ritthiphakdee...

2007 Johns Hopkins Bloomberg School of Public Health

Tax and Health PromotionTax and Health Promotion

Bungon RitthiphakdeeSoutheast Asia Tobacco Control Alliance (SEATCA) Action on Smoking and Health (ASH) Thailand

2 2007 Johns Hopkins Bloomberg School of Public Health

Learning Objective

Learn how to advocate for tobacco tax policy based on Thailand’s experiences


Taxation: The Most Effective Tobacco Control Measure

World Bank report, Curbing the Epidemic (1999) Found that higher tobacco taxes:

Induce quitting Reduce consumption Prevent starting

World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) Article 6 (2003): “The parties recognize that price and tax

measures are an effective and important means of reducing tobacco consumption by various segments of the population, in particular, young persons.”


Reluctance to Increase Tobacco Taxes

Do not know or are uncertain about the benefit of a tax increase (true or pretended)

Listen to common arguments against tax increases Government may loose income Smuggling may increase

Concern about political popularity Hurt smokers, especially the poor

Influence from the tobacco industry


Tobacco Industries Know Taxation Is Effective

“A price increase can cause a decline in the number of people who use the product or in the amount of the product its users consume. Usually it works both ways … both by increasing the number of smokers who quit and decreasing the number of young people who begin to smoke.”

— Philip Morris, 1982

Source: Philip Morris Internal Documents. (1982).

2007 Johns Hopkins Bloomberg School of Public Health

Section ASection A

Where to Start?


Key Questions to Answer

What is the tobacco tax system in your country? How is tobacco taxed? What is the percentage of the excise tax to

the retail price? Which organization is in charge of tax

decisions and collections?

What evidence is needed to move tax policy in your country?

Who are the experts in your country? Experts can help generate local evidence and

make predictions


Source: Chaloupka et al. (2000).

Evidence: World Bank Report

A 10% price increase reduces demand by: Four percent in high-income

countries Eight percent in low- or

middle-income countries Long-term effects may be

greater

Young people and the poor are the most price responsive


Image source: Lung Health Image Library. (2007).

What Is the Impact on Poor Smokers?

Poor smokers tend to spend a higher proportion of their income on tobacco

How do they react to a tax or price increase? More likely to quit or reduce

consumption, which will improve health and release income for other uses

Increased tax revenue can be used to benefit the poor


Translate World Bank Estimation to a Local Context

Potential health benefits of a 10% increase in the real price of tobacco through taxation in Thailand would: Lead to a 10% decrease in adolescent smoking Prevent 75,400 current youth (15- to 19-year-

olds) from taking up smoking Prevent 9,425 future deaths of today’s Thai

adolescents


Developing Your Advocacy Plan: Key Questions

What do you want to achieve?

Who can make it happen?

What do they want to hear?

Who are your messengers?

How do you communicate your evidence?

Who are your allies?


What Do You Want to Propose?

Tobacco tax increase Be specific: How

much of a tobacco tax increase do you want?

Have a very clear policy proposal

Clear

policy

proposal


Source: Kinh et al. (2006).

How High Should Tobacco Taxes Be?

A comparison with international practice Two-thirds to three-quarters of retail price

A comparison with that of countries with similar level of development Consider how far a country may be below or

above the international standard


Who Can Make It Happen?

Cabinet

National assembly or parliament

Ministry of finance Key gatekeeper to tobacco tax policy


What Do They Want to Hear?

Develop a strong, country-specific message that includes: How a tobacco tax increase is good for the

country and good for them (policy maker/politician)


Who Are Your Messengers?

Minister of health

Tax experts or health economists, both local and international

Tobacco control champions

WHO

World Bank


Communicate Effectively with Policy Makers

Prepare tax increase proposal by working closely with: Minister of health Economists

Submit tax proposal to: Cabinet Health minister Finance minister Media


Key Content of Tax Proposal

Why tobacco tax policy is needed

Best practices on tax policy (FCTC/The World Bank)

Country situation How low tobacco tax/cigarette price is in your

country Burden from tobacco use

Recommendation How much tax should be increased? Projection of sale and income

Answer arguments from tobacco industry and policy makers


Source: Excise Department, Ministry of Finance, Thailand.

Projected Effect of Tax Increase, Thailand

1992 1994

Tax as percent of retail price

55% 61% 63%

Sales in millions of packs 2,035 2,094 2,094

Revenue in millions of baht(If tax is not increased)

15,43819,000(17,000)

21,400(17,000)

Decrease in youth smoking — 200,000 300,000

Option I Option II


Two Policy Options

Keep the tax low Sell more cigarettes Revenue increases slowly Number of smokers increases, especially among

youth

Increase the tax Cigarette sales do not increase Big increase in revenue Number of smokers decreases, especially among

youth


*Source: Telephone poll. (1982).

Conduct Public Opinion Poll

Amount of people supporting tax increase*: Over 80% of nonsmokers 65% of smokers Overall, 70% support tax increases

Communicate effectively with policy makers Once they know that the majority of the public

supports the policy, they are more comfortable implementing the policy

Well-planned media advocacy Identify potential media or journalist Release of opinion poll prior to cabinet

meeting


Thai Cabinet Resolution in 1993

Increase excise tax from 55% to 60%

Plus regular increases with inflation

Cigarette price rose from 15 to 18 baht (for a popular domestic brand)