Tobacco tax hike 'not enough'
2010-02-17 21:15
Johannesburg - The government squandered another opportunity to encourage smokers to quit and to raise revenues, the National Council Against Smoking said on Wednesday.
Council spokesperson Dr Yussuf Saloojee said Finance Minister Pravin Gordhan's budget increase of R1.24 more on a packet of 20 cigarettes was no surprise.
"[The] finance minister has obdurately stuck to a policy which keeps tobacco taxes low and so favours the tobacco companies at the expense of public health and government revenues," he said.
He said tax on tobacco products in South Africa was the lowest in the world.
The government has since 1997 set the cigarette tax rate at 50% of retail price, which increased marginally to 52% in 2002," he said.
"In Ireland a packet of 20 cigarettes costs R93 with taxes making up 79% of the retail price.
"The average tax incidence in the 27 member states of the European Union is 78%."
Saloojee said the raising of taxes on tobacco products was the most effective way to reduce tobacco use, especially amongst the young and the poor.
"People in these two groups are more price conscious. Higher prices convince them to quit or not to start in the first place."
He said an increase in tobacco tax rates was not only a sound public health policy but a good way to boost the economy.
"Higher taxes reduce tobacco consumption, lower healthcare costs, help households save money by reducing tobacco use and increase government revenues."
- SAPA