The effective use of taxes, which is crucial to control tobacco consumption, is still wanting, a Research Analyst with the Economic Policy Research Centre (EPRC) has cautioned.

Anita Ntale raised the red flag during a dissemination workshop held on February 27, 2018 at EPRC for a paper titled “ Tobacco Control in Uganda: An analysis of tax and consumption patterns” which she co-authors with Ibrahim Kasirye.

“Existing taxes are still below the globally recommended thresholds, for example 70 percent excise tax and 75 percent of total tax,” She said adding that excise taxes currently make up 31 percent of the retail price for regular cigarettes.

Tobacco Study Dissemination Aniota Reacts Website photo

Total taxes (Excise and VAT) make up only 42 percent of the retail price and Uganda has a tiered excise tax, which is vulnerable to manipulation.

In 2017, the World Health Organization (WHO) estimated that tobacco use kills up to 7 million people each year and nearly 80 percent of the world’s smokers are from low and middle-income countries.

Tobacco usage in Uganda

According to the data compiled by the duo, tobacco use continues to be more common among men than women.

Uganda National Household Survey (UNHS) 2016/2017 reveals that 5.4 percent of Ugandans are currently using or have used tobacco and related products in the past. The same survey shows that males are more than four times more likely to report ever using tobacco products than females (8.5 percent and 2 percent respectively).

A policy brief issued inline with the study says although the percentage of tobacco use has reduced over the past 5 years from 10.5 percent in 2012/13 to 5.4 percent in 2016/17 (UNHS), smoking prevalence among the youth has remained higher.

Policy Recommendation

The policy brief recommends that excise tax changes must take into account GDP growth and inflation. The cigarette tiers should be unified into a uniform tax and cigarettes need to be priced at a rate that discourages new smokers.

Additionally, preferential tax rates for domestically produced cigarettes need to be removed. Regulation of ‘other’ tobacco products needs to start before there is a high rate of substitution.

Ibrahim Kasikrye calls for more research to estimate the indirect revenue gains of higher taxes. He announced that the final paper is due to be shared soon afterwards.

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