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Logo of Phnom Penh Post newspaper Phnom Penh Post - Calls grow for cigarette tax

Calls grow for cigarette tax

Packs of local and international branded cigarettes are displayed for sale in Phnom Penh
Packs of local and international branded cigarettes are displayed for sale in Phnom Penh. PHA LINA

Calls grow for cigarette tax

Anti-smoking advocates called on the government yesterday to raise tariffs on cigarettes, touting the health and revenue-generating benefits of a sin tax widely applied in other countries.

In a conference at the Sunway Hotel in Phnom Penh, the Southeast Asia Tobacco Control Alliance showed that Cambodia has one of the lowest tobacco tax rates in the region as a percentage of retail prices.

“We urge the Cambodian government to increase tobacco taxes to the same rate as other countries in Asia, because when the tax increases, the price of tobacco will increase too, so people will choose not to buy it and smoke,” said Bungon Rithiphakdee, director of the tobacco control alliance.

According to the group’s report, titled The Asean Tobacco Control Atlas, only Laos beats out Cambodia for the lowest rate of tax as a percentage of retail price. Cambodia’s is at 20 to 25 per cent, while the rate in Laos stands at 16 to 19 per cent.

The report singled out Thailand, which has raised its rate 10 times between 1991 and 2012, with an almost fourfold increase in revenue. Smoking also went down in those years. Thailand bumped the rate up to 87 per cent in 2012 to combat a slight uptick in smoking, the report said.

Falling into the 40 to 70 per cent range are Brunei, Indonesia, Malaysia, Myanmar, Philippines, Singapore and Vietnam.

Cigarettes are cheap in Cambodia, with the top five brands (ARA, Cambo, Luxury, Romdoh, Lapin) costing less than a $1.

Mom Kong, the executive director of the NGO Cambodia Movement for Health, said that raising the rate will throw up a cost barrier.

“When the price of cigarettes goes up, people will not buy them. They will save their money for other beneficial products,” he said.

According to a 2011 World Health Organization report, nearly 10,000 people die each year from tobacco-related diseases in Cambodia.

Efforts to jack up the taxes on cigarettes aren’t new, and the government is reluctant to make any major changes overnight.

Chour Se, an official from the general department of taxation at the Ministry of Finance and Economics, said that the government is willing to increase the tax at some point, but going from 20 to 70 per cent is drastic.

“If we increase it in a hurry to 70 or 80 per cent of taxation, the tobacco industries will close, so the tax benefits will never happen. We need a long time to do this job. And we cannot increase taxes for tobacco and not other products in the markets, such as rice,” he said.

Cambodia’s tobacco industry also takes hits from illegal trade in the product, which generates about $16 million a year in an industry worth about $30 million to $40 million, according to British American Tobacco (Cambodia).

Representatives of BAT, which produces brands Ara and 555, did not immediately respond to requests for comment on how a tax could impact the industry.

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