Increase duty on tobacco & alcohol products to help reduce pressure on health system: Wale

By Gary Hatigeva

MEMBER of Parliament for Aoke/Langalanga and Chair of the Bills and Legislation Committee (BLC), Matthew Wale has urged for increased levy on products that are contributing negatively to the health system and socially impacting families in the country.

Cigarettes and alcohols were however, the main highlights of the Aoke/Langalanga MP in his speech when contributing to the debates on the general principles of the Goods Tax (Amendment) Bill 2018.

The BLC Chair stressed that cheap prices to the noted products continue to make it easier for consumers to buy them, which continues to trigger negative impacts on the health and social aspects Solomon Islands.

He said while it is commendable for the government to come up with amendments to the existing tax laws to curb the issue of tax evasion, there is more needed to be done on it especially on the humanitarian aspects of things, and this should be reflected in a good and effective tax law.

He added that a good tax law should be guided by policy goals that seek to raise revenue, so as reprice goods and services considered to be incorrectly priced by the market, which includes tobacco and alcohol.

Wale said they are so cheap that more people smoke too much as they are very affordable, which in an uncontrolled manner, always leads to health problems, and bills to cater for health care becomes under immense pressure for the government.

He therefore suggested that tax should be increased on cigarettes and other related products so they becomes more expensive to discourage the high consumption and use.

He added that alcohol is another, where it also becomes cheap that more people afford to consume more, which in a lot of cases, also leads to complicated health issues, and unfortunate social unjust in the homes.

Also sharing similar sentiments on this, during his contribution to the bill, MP for East Honiara and Chair of the Public Accounts Committee, Douglas Ete supported the call and added that there should be an overall increase to all shield goods, which includes cigarettes, alcohols, sugary products and products as such should be imposed slightly higher taxes.

The calls also come in line with a familiar call that continued to be made by the World Health Organisation (WHO) for countries to raise taxes on the highlighted products specifically, tobacco.

This is to encourage users to stop and prevent other people from becoming addicted to tobacco, and based on recent data, WHO estimates that by increasing tobacco taxes by 50 percent, all countries would reduce the number of smokers by over 40 million within the next 3 years and ultimately save 11 million lives.

According to WHO, every six seconds someone dies from tobacco consumption, and it actually kills up to half of its users.

It also incurs considerable costs for families, businesses and governments, and treating tobacco-related diseases like cancer and heart disease is expensive with tobacco-related disease and death often strikes people in the prime of their working lives, productivity and incomes fall.

Health experts also supported the calls, stating that raising taxes on tobacco, alcohol and other related products is the most effective way to reduce use and save lives, and determined action on goods tax policy will for sure hit certain industries where it will hurt, but this will certainly benefit the young and poor people of this country the most.

High prices are particularly effective in discouraging young people (who often have more limited incomes than older adults) from taking up alcohol and smoking, and on the economic aspect of it, WHO in an earlier statement calculated that if all countries increased taxes especially on tobacco by 50 percent per pack, governments would earn an extra US$ 101 billion in global revenue.

These additional funds according to WHO should be used to advance health and other social programmes.

Apart from Alcohol, Tobacco use is reported to be the world’s leading preventable cause of death and it kills nearly 6 million people each year, of which more than 600,000 are non-smokers dying from breathing second-hand smoke.

It is therefore pointed out that if no action is taken, these dangerous products will kill more than eight million people every year by 2030, and more than 80 percent of them are among people living in low- and middle-income countries, which of course includes Solomon Islands.

And this is a concern for leaders who expressed views on this, as many thought it will lead to an increasing cost to other aspects of the government’s bill, which are non-revenue based and public service based.