Prof. Prakit Vathesatogkit, Executive Secretary of Action on Smoking and Health Foundation welcome the government policy of increasing cigarette tax. He believes that the tax increase will greatly benefit smokers in Thailand. This is due to the fact that the higher cigarette price will result in people smoking less or quit completely, especially in the lower income group.
A country-wide research conducted in 2006 to evaluate the impact of tobacco tax increase, from 75% to 79% which led to 15% increase in price found that 58% of smokers smoke less while 10% have shifted to cheaper brand of cigarettes. Furthermore, 23% purchase only single sticks and 9% switch to hand-roll cigarettes. The number of people who quit smoking completely was at an impressive 10%.
Dr. Prakit said, “From 1993 to 2007, the government of Thailand had increase tax 8 times in total. This gradually increased the price of Krongtip (the most popular brand of cigarette) from 15 Baht per pack to 45 Baht per pack (while the latest increase leads to 56 Baht). The impact was most evident in the lower income group in Thailand, which the smoking prevalence has declined from 42% in 1991 down to only 20.7% in 2007. The household income this group spent on cigarettes also reduced from 16.30% in 1991 to 8% in 2007.
According to the World Bank, the tobacco tax should be two-third or three- fourth (66-80%) of retail price in order to have desirable impact in reducing tobacco use. The current tax burden on cigarette is now 69% of the retail price (or 85% of factory price plus 7% VA, 2% health tax, 1.5% Public television tax and 0.5% local tax). World Bank has recommended all governments to use Tobacco tax increase as one way to fight poverty. The obvious reason is that money saved from cigarette either by quitting or reducing number of cigarette can then be spent on the improvement of healthier life-style as well as to support their families.
(The author is the Director, Jay-Inspire Inc, Thailand. Website: www.jay-inspire.com)
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