393The turning point: the success story of campaign to raise excise taxes on tobacco products!
The price of cigarettes has been and still is the decisive factor in attracting young people to tobacco addiction. Since the emergence of multinational tobacco corporations into Ukrainian market, the lowest rates of excise duty and, respectively, cheap cigarettes, are the keys to their sustainable financial success. From 1995 to 2005 Ukraine has become the 4th country in the world in the prevalence of smoking. As a result, every year nearly 100 thousand Ukrainians prematurely die due to their own or someone else’s tobacco addiction. Up until 2008, tobacco industry companies “effectively” influenced government’s taxation policies on tobacco products: cigarettes were cheaper than milk and chocolate, the annual increase of excise duties had always been lower than the inflation rate and excise taxes in Ukraine were among the lowest in whole Europe.
In 2008, the community in collaboration with economists, famous doctors, and politicians launched an advocacy campaign to raise excise duties, coordinated by the future founders of the “Life.” Organization of public actions under the walls of the Cabinet of Ministers and the Parliament, press conferences https://center-life.org/fotogalereya/pres-lanch-akcizi-na-sigareti , which involved international experts, expertise in designing and predicting the economic benefits of raising excise and debunking false arguments of the tobacco industry helped the community to change the political climate and break the deadlock over the situation. In summer 2008, after the meeting with experts from Coalition the Prime minister expressed political support for the initiative to increase excise taxes on tobacco products. On September 1, 2008 the excise duty was almost doubled comparing to the previous rate. In 2009, the community in collaboration with the Budget Committee has developed a draft of the law project # 4202 “On Amending Certain Legislative Acts of Ukraine on Duty Tax” and that hiked tobacco taxes again. The Law also included provisions on annual inflation indexation of specific excise rates: since January 2010 the rates were raised by 15%.
As the result, due to higher rates of tobacco excise taxes in 2008-2011, the State Budget of Ukraine increased its revenues considerably: in 2007 – 2.4 billion, in 2008 – 3.6 billion, in 2009 – 9 1 billion, in 2010 – 13.1 billion in 2011 – 15.3 billion UAH http://tobaccocontrol.bmj.com/content/21/4/429.abstract .
Significant increase of excise taxes on tobacco products in the period of 2008-2010 in combination with other measures of tobacco control allowed achieving significant decline in smoking prevalence in Ukraine. According to the State Statistics Service, the prevalence of smoking among people older than 12 years decreased from 25.6% in 2008 to 22.4% in 2010, i.e. by 3.3 percentage points, or 13%. In 2011, excise taxes rose very moderately and did not exceed inflation rate.
Continuing its efforts to increase prices for cigarettes, on July 2012, the day before the close of the 10th session of the Parliament, Centre “Life”, in cooperation with WHO Bureau in Ukraine, experts and members of Interparty Parliament group “Smoke Free Future for Ukraine” initiated and registered a Draft Law aiming to increase excise duties in 2012 up to the rate of 35%. Such growth will provide rise in prices on cigarettes by an average of 2 UAH per pack and will provide about 1 billion UAH of additional revenue to the State Budget. Also it will guarantee lead to a 3-5% reduction in smoking rates, which means hundreds of thousands of saved lives.
In 2008, the community in collaboration with economists, famous doctors, and politicians launched an advocacy campaign to raise excise duties, coordinated by the future founders of the “Life.” Organization of public actions under the walls of the Cabinet of Ministers and the Parliament, press conferences https://center-life.org/fotogalereya/pres-lanch-akcizi-na-sigareti , which involved international experts, expertise in designing and predicting the economic benefits of raising excise and debunking false arguments of the tobacco industry helped the community to change the political climate and break the deadlock over the situation. In summer 2008, after the meeting with experts from Coalition the Prime minister expressed political support for the initiative to increase excise taxes on tobacco products. On September 1, 2008 the excise duty was almost doubled comparing to the previous rate. In 2009, the community in collaboration with the Budget Committee has developed a draft of the law project # 4202 “On Amending Certain Legislative Acts of Ukraine on Duty Tax” and that hiked tobacco taxes again. The Law also included provisions on annual inflation indexation of specific excise rates: since January 2010 the rates were raised by 15%.
As the result, due to higher rates of tobacco excise taxes in 2008-2011, the State Budget of Ukraine increased its revenues considerably: in 2007 – 2.4 billion, in 2008 – 3.6 billion, in 2009 – 9 1 billion, in 2010 – 13.1 billion in 2011 – 15.3 billion UAH http://tobaccocontrol.bmj.com/content/21/4/429.abstract .
Significant increase of excise taxes on tobacco products in the period of 2008-2010 in combination with other measures of tobacco control allowed achieving significant decline in smoking prevalence in Ukraine. According to the State Statistics Service, the prevalence of smoking among people older than 12 years decreased from 25.6% in 2008 to 22.4% in 2010, i.e. by 3.3 percentage points, or 13%. In 2011, excise taxes rose very moderately and did not exceed inflation rate.
Continuing its efforts to increase prices for cigarettes, on July 2012, the day before the close of the 10th session of the Parliament, Centre “Life”, in cooperation with WHO Bureau in Ukraine, experts and members of Interparty Parliament group “Smoke Free Future for Ukraine” initiated and registered a Draft Law aiming to increase excise duties in 2012 up to the rate of 35%. Such growth will provide rise in prices on cigarettes by an average of 2 UAH per pack and will provide about 1 billion UAH of additional revenue to the State Budget. Also it will guarantee lead to a 3-5% reduction in smoking rates, which means hundreds of thousands of saved lives.