Participants in a discussion forum on tobacco taxation held in Phnom Penh on Tuesday. CMH
Around 100 participants from the Ministry of Economy and Finance, the Ministry of Health and NGOs working in the health sector held an online forum on January 18 to discuss tobacco taxes in a bid to reduce deaths, illnesses and disabilities caused by tobacco.
The forum released new study results on the health and economic burden from tobacco use and to learn about tobacco tax measures, tobacco tax rates and other relevant information in the region and the world.
The forum also provided an opportunity for participants to be able to study best practices of tobacco tax measures in the ASEAN region and to support a tobacco tax increase for tax revenue and health benefits.
Executive Director of the Health Action Coordinating Committee Tim Vora said that members of the NGO network working in the health sector requested a tax increase because tobacco is a product that poses a serious risk to public health.
“Tobacco is a product that kills about 50 per cent of those who use it. Every year worldwide, about 7 million people die from direct tobacco use, and about 1 million die from second-hand smoking. Among those killed, about 15,000 were Cambodian,” he added.
Technical officer of the World Health Organization Yil Daravuth said that tobacco use cost Cambodia about $649 million, or about 3 per cent of Cambodia’s GDP a year.
“If Cambodia raised the tax to 75 per cent of the retail price of cigarettes on the recommendations of WHO and the World Bank, Cambodia would receive an additional $235 million in additional tax revenue over the next five years and $933 million in the next 15 years,” he said.
Similarly, Cambodia Movement for Health (CMH) executive director Mom Kong said that raising tobacco tax was a desire of the Cambodian people as a 2021 survey conducted by Meanchey National University showed that 94 per cent of the Cambodian people supported the measure.
“Raising the tax is a win-win strategy as WHO stated that raising the tobacco tax is an effective way to reduce the harm caused by tobacco use and increase tax revenue for the government as well. But requests for the tax hike have often encountered many obstacles,” he added.
Bungon Ritthiphakdee, executive director of the Global Centre for Good Governance in Tobacco Control (GGTC), said that tobacco companies have clearly acknowledged that raising taxes leads to higher cigarette prices and is effective in reducing the use of cigarettes, so the companies have used every means to prevent the increase.
She added that one of their tactics was to spread the false information that raising the tax affected low-income smokers and led to tax evasion.
“Many countries around the world have made it clear that raising the tobacco tax is a win-win policy for governments. The first win is that the government will receive additional tax revenue. The second win is that this measure is good for public health because smokers smoke less or quit smoking, while young people cannot buy cigarettes,” she continued.
Se Sokhorn, deputy director-general of the General Department of Customs and Excise, said there are many factors linked to an increase in the tax on tobacco. If the government chooses to increase tax as part of its core plan, it must be accompanied by educational measures.
He said changes in tax policy must be balanced to be effectively implemented as part of national policy, but at this stage the tax increase cannot be put in into effect because it would be beyond the capacity of the department, and would likely lead to an increase in crime.
“The state needs money, so why does the state not raise taxes on this product? Not everything is as clear cut as it appears. A higher tax rate would run the risk of increasing not just the smuggling of tobacco, but also counterfeit goods. If a tax increase is introduced, it will encourage more crimes as the effectiveness of law enforcement remains limited,” he added.
According to Sokhorn, the government’s plan was not to raise the tax immediately to 75 percent. The government had a plan to raise the tax, but it would be dependent on the context of the country’s development.
Tax on tobacco in Cambodia is 25 per cent of the retail price for domestically produced cigarettes and 31 per cent for imported cigarettes. The rate is low when compared to the tobacco taxes of other ASEAN countries, according to the CMH.
