Pretoria - The National Council Against Smoking says the increase in excise tax on cigarettes announced by government yesterday is inadequate.
"The increase of 80 cents per pack of 20 cigarettes announced in the budget may seem high to some, but it is inadequate. It will fail to meet the Treasury's twin goals of optimising revenue collection and of reducing tobacco consumption," said the council.
The council explained that cigarette manufacturers and not the Treasury effectively decided the excise tax level.
"The current excise tax formulae used by the Finance Ministry gives the tobacco industry complete power to determine the amount by which excise taxes will change in the budget. In handing over excise tax policy to the tobacco companies, the Treasury is failing the country.
"Since 2004, the industry has increased its prices less aggressively and as a result, for the first time in over a decade, cigarette consumption rose in South Africa. Between 2004 and 2008, total cigarette consumption rose by 6.5 percent, after having fallen by 31 percent in the previous 10 years," the council explained.
It said there was an urgent need to review South Africa's tobacco tax policy, suggesting that the rate of tobacco excise tax increases should be designed to reduce the affordability of tobacco products by increasing the tax in line with increases in income and inflation.
"Research shows that smokers are more likely to quit when the price of cigarettes goes up. The tax on cigarettes should be set at a level that would pave the way for smokers to re-evaluate how smoking affects not only their health, but their finances and calculate how much they could save by quitting," it said.
The council added that increasing cigarettes tax was not only about the government generating revenue but about the government fulfilling its duties of protecting and saving lives.
More youngsters would have been encouraged not to start, more adults would have quit, and more tax revenue generated if the excise hike had been greater, said the council. Each year, about 44 000 South Africans are killed by tobacco related illnesses.
For free help and advice on quitting, call the Quit Line on 011 720 3145.
