Tobacco taxes: a win-win strategy for public health and government revenue in Kenya
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1
International Institute for Legislative Affairs, Kenya
2
Campaign for Tobacco Free Kids (CTFK), United States of America
Publication date: 2018-03-01
Tob. Induc. Dis. 2018;16(Suppl 1):A112
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ABSTRACT
Background and challenges to implementation:
Kenya's excise tax system has changed over the
years from specific taxes to ad-valorem, hybrid, tiered system
and eventually a uniform specific rate for all tobacco products. Prior
to 2015 the real price of cigarettes was on the decrease, increasing their affordability; cigarette
tax revenues was decreasing even as tax rates and consumption was increasing
and the excise tax share in cigarette price was low, compared to the WHO recommended 70%. This impacted negatively
on public health and fiscal goals of tobacco taxation in Kenya.
Intervention or response:
From 2010, Kenyan TC advocates implemented a campaign to advocate for implementation of
effective tobacco tax systems in Kenya. The campaign comprised of five key
components; advocacy leadership by a national civil society organization; buy- in and commitment of the national treasury
and the revenue authority; effective engagement and collaboration of key local
and international partners who provided research, technical, financial, media
and other support; effective countering of tobacco industry tax arguments and
strategies with research and action; and strategic use of media to engage the public around tax issues and gain public support.
Results and lessons learnt:
The main outcome of the this campaign was the
enactment of the Excise Duty Act 2015 which simplified the structure to uniform
specific and increased the rate from Ksh. 1200 per
mille to KShs 2,500 per mille. It was estimated that this would result in a 3.4% decline in consumption and 0.3% decline in adult smoking prevalence.
The success is attributed to strong macro- economic expertise in the local advocates, a good understanding of processes and role of different actors, local data for evidence based advocacy and monitoring, exposing and countering industry arguments.
Conclusions and key recommendations:
An effective tobacco tax campaign is anchored
on engaging non- traditional TC
partners like the ministry of finance, revenue authorities and finance committees
of national assemblies.