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Business Mirror

Sunday
Nov 22nd
Support from big tobacco PDF Print E-mail
Opinion
Written by Sway / Marvin A. Tort   
Thursday, 05 November 2009 21:00

The tobacco debate is rarely played up as a public-health issue, and is almost always seen in light of major business investments by local and foreign cigarette makers, factory jobs, protection of Northern Luzon farmers, and political concessions to the Northern Alliance or Northern Bloc of politicians, among other things. But even in terms of public health, it can actually be a potent positive force, if it chooses to be one.

The tobacco debate is partly a public-finance issue, even if only a relatively small amount of government money is spent on tobacco-related illnesses. And for the same reason, it is not a major legal issue locally, unlike in the United States. But is also important to note that local cigarette makers or importers are also involved in other major businesses, and this adds to their political clout and influence, and if only they choose to do so, they can actually use this clout to promote the public good.

Big Tobacco in the Philippines, at most, is viewed as a minor regulatory issue. Except maybe for the staunch anti-tobacco advocates, the rest of the public does not seem to care much whether people smoke—or litter cigarette butts—in public places, that passive smoking or inhalation of second-hand smoke is just as dangerous, if not more dangerous, than smoking itself, and that even household pets like dogs can also succumb to illnesses related to passive smoking.

Even advocates’ fight against tobacco advertising has gone to court, including one suit involving cigarette taxes, all because of questions on congressional intent relative to regulating the use and sale of tobacco products. The proposal to use big graphic warnings on cigarette packs was likewise set aside for supposedly being unnecessary and perhaps redundant.

And all this time, the public, in general, fails to register any strong support or opposition for either side. The disparity, however, is obvious in the fact that smokers themselves rarely speak out for their cause and their right to smoke, while non-smokers have been relatively vocal about the ills of the smoking habit. If at all, only the cigarette makers and tobacco producers themselves—and those likewise benefitting from the trade—are the only ones vocally supportive of smoking.

And this begs the question: if smokers themselves as a constituency won’t speak up for their right to smoke, and will not fight legislation or regulation to curtail their habit and to protect the health of the non-smoking public, then should there be any cause for concern over efforts to efficiently and responsibly regulate the industry? All with the public good in mind, of course.

In this sense, one can’t fathom some efforts, invariably by tobacco producers themselves, to fight better information to the public through graphic warnings on cigarette packs, or indirectly limiting the sale to minors by banning advertising, or improving tax collection by making the process more transparent and accountable, or increasing taxes on tobacco and earmarking the incremental collection for public-health projects.

Big Tobacco is obviously a business, but just like any business, it should be fairly, efficiently, responsibly and sufficiently regulated by the government given the character and nature of its product offering. There are enough studies published to indicate that smoking can be dangerous to one’s health, but I have yet to come across any research to indicate that smoking is actually beneficial to one’s health, or that not smoking is actually detrimental to a person’s welfare. The ills of smoking are proved facts, and thus better government regulation of tobacco sale is an urgent necessity.

Sadly, other than vocal anti-tobacco advocates, and some enlightened officials in government and in Congress, the need for better regulation seems to be lost on most. Higher taxes, for instance, are always played up as anti-poor and will have the effect of reducing consumption and thus potential business losses for producers and their suppliers, i.e. tobacco farmers.

The same can actually be said of alcohol or liquor and firearms, but does this mean that government should desist from strictly regulating these industries as well? In the case of firearms, mere illegal possession is already considered punishable by law, for the simple reason that guns, when in the wrong hands can result in public menace or even death. But doesn’t the same argument apply to tobacco? Unrestrained and unregulated use can also lead to possible death, and the same goes for alcohol?

I am digressing. But pushing the argument to border on the absurd, perhaps the government can also issue licenses for tobacco and alcohol possession and use? This is absurd, indeed, and perhaps pointless, and obviously most impractical. A more efficient initiative, and perhaps publicly beneficial, is leveling the playing field through taxes—or at least the efficient, transparent, and accountable collection of taxes on cigarettes.

A significant source of learning is the US experience. Earlier this year, the US Congress approved the SCHIP or the State Children’s Health Insurance Program. President Obama enacted the unanimous approval of both the US House of Representatives and the US Senate. The SCHIP law aims to expand health-care coverage for children using funds from a 62-cent-per-pack increase in the federal cigarette tax.

The new tax expected to raise SCHIP coverage to 11 million children from 7 million as it raised federal cigarette tax to a total of $1.01 per pack, thus generating estimated revenues of $71.4 billion for the federal government over five years. And obviously, this additional money will go a long way in boosting social protection, particularly for children’s health, during an economic downturn.

The planned use of additional cigarette taxes for targeted spending on children’s health care is a perfect example of how smokers themselves, through their support for additional taxes on their vice, can contribute to public welfare. A recent study by the government think tank Philippine Institute for Development Studies (PIDS) indicates that the proposed restructuring of local taxes on cigarettes and liquor can prospectively raise up to P60 billion in additional revenues for the government every year.

Simulations by the government also show that the proposed increase in “sin” taxes, now pending in Congress, can have the biggest impact on revenue collection—an estimated P22 billion in the first year of implementation, another P30 billion to P40 billion in the second year, P40 billion to P50 billion in the third year, and P60 billion to P70 billion annually thereafter. And while Congress contemplates this proposal, the Executive should likewise move to make efficient, transparent, and accountable the collection of taxes on cigarettes and perhaps liquor.

If only smokers can support the noble aims of efficient taxation of their vice, then there shouldn’t be any reason for cigarette makers and importers, and even tobacco farmers as well as their representatives in Congress, to fight efforts for better—if not higher—tax collection and cigarettes and tobacco products. How can any of them begrudge or fight efforts to improve health care particularly for children?

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