Extracting the full benefit of increasing tobacco taxes requires a simultaneous crackdown on the illicit trade in cigarettes, former Senegalese finance minister Amadou Hott warned delegates to the World Conference on Tobacco Control in Dublin on Tuesday.
“If you don’t fight smuggling you won’t have the desired effect,” said Hott, calling for greater regional co-operation between nations to counter the trade in illicit tobacco, which refers to products on which the manufacturers do not pay tax.
Raising tobacco taxes has featured strongly at the conference as a means to curb consumption and raise additional revenue while many developing countries have been hit hard by the decline in global health funding. The US has slashed humanitarian aid and research grants, while many Western European nations have cut back on overseas aid as they seek to increase defence spending.
“Raising taxes on tobacco is a proven way to reduce tobacco use, while generating revenues to reinvest in health. And with official development assistance falling, taxation can raise domestic resources for health,” World Health Organisation director-general Tedros Adhanom Ghebreyesus said at the opening plenary on Monday.
Hott echoed those sentiments, saying many African countries were in debt distress and under immense fiscal pressure. “Ministers of finance are looking for ways to raise more money. The easiest way is to raise taxes on alcohol and tobacco, because in most African countries people don’t complain,” he said. Senegal had increased the excise tax on cigarettes last year to 70% from 50%.
Tobacco use was responsible for 7.36-million deaths in 2023, according to the latest data from the Global Burden of Disease Study presented at the conference by researchers from the Institute for Health Metrics and Evaluation (IHME) at the University of Washington.
The IHME previously estimated there were 32,000 deaths due to tobacco in SA in 2021, with 79% due to smoking and the balance due to second-hand smoke.
Despite the evidence that increasing taxes is one of the most cost-effective measures for reducing tobacco use, SA is among 134 countries that have failed to use it to make cigarettes less affordable since 2014, according to the WHO global tobacco epidemic 2025 report.
The latest budget by finance minister Enoch Godongwana in May increased the excise duty on a pack of 20 cigarettes by R1.77 to R22.81, a nominal increase of 4.75% and a real increase of just 0.67%.
SA is also battling a growing trade in illicit tobacco, which critics of the draft Tobacco Products and Electronic Delivery Systems Control Bill say should be addressed before new controls are brought into effect.
The illicit trade constituted 58% of the cigarette market in SA and cost the government R17.6bn in lost excise and VAT revenue, according to a peer-reviewed study published by UCT’s Research Unit on the Economics of Excisable Products in the British Medical Journal in 2024.
Organisation for Economic Co-operation and Development senior tax economist Bert Brys said the existence of the illicit trade in cigarettes was not a good reason to defer tax increases on tobacco. “There is a lot of corporate tax avoidance and evasion but that doesn’t mean we don’t tax corporations,” he said.
• Kahn’s reporting trip was sponsored by the conference organisers, the International Union Against Tuberculosis and Lung Disease.
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