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State Sen. Mike Gloor of Grand Island said introduction of legislation to increase the state’s tax on tobacco products has been needed for a long time. Under the proposal Gloor introduced on Tuesday, the state’s cigarette tax would increase from 64 cents per pack to $1.99 per pack.
That increase in the cigarette tax is estimated to generate $111 million in revenue, along with another $4.5 million in new revenue from taxes on other tobacco products. Currently,[link widoczny dla zalogowanych], a pack of cigarettes can run between $4 and $6 per pack and a carton of cigarettes can cost $50 or more. Gloor’s legislation also includes an earmark to replace a proposed funding cut to the Tobacco Control and Prevention fund that educates young people and others about the health dangers of tobacco addiction.
Another earmark would replace a proposed funding cut to health care providers through Medicaid that takes care of people with long-term health problems due to tobacco addiction. The earmarks total about $31 million. The rest of the revenue would go to the general fund to be used for state expenditures.
The industry’s political status, implied by the fact that the head of the STMA is also deputy head of the MIIT, allows it to influence public health policy in a way most other countries would not countenance. The MIIT’s attitude towards tobacco control was reflected in the words of Li Yizhong, the MIIT minister at the the National Tobacco Work Conference in January.
“It is our core task to control the tobacco leaf production scale,” he said,[link widoczny dla zalogowanych], before adding, “Great efforts must be taken to raise the efficiency of the tobacco industry and achieve good and fast development.” However,[link widoczny dla zalogowanych], new studies are challenging the prevailing belief – even among non-smokers – that the tobacco industry is too important to the economy to discourage its development.
Tobacco generated 513.1 billion yuan (77.3 billion US dollars) in taxes and profits last year,[link widoczny dla zalogowanych],[link widoczny dla zalogowanych], more than 7.5 per cent of the total central government revenues,[link widoczny dla zalogowanych],[link widoczny dla zalogowanych], and employed 520,000 workers in 183 factories, said Zhang Xiulian, spokesman of the STMA, in a press conference in January. The tobacco industry prides itself on paying approximately P25-30 billion in excise taxes.
But such taxes are low, and such revenues have been eroded by inflation and other weaknesses in the current sin tax law. Yearly, tobacco-related diseases claim at least 90,000 Filipino lives and cost our country P281-461 billion in health care expenditures and productivity losses. Reducing these significant losses requires principled and unwavering political leadership from the Aquino administration.
We offer these facts in response to some of the misinformation being spread by the tobacco industry. Contrary to PATDA and PTGA claims, the WHO FCTC has the welfare of tobacco farmers and workers in mind. Under Articles 17 and 18, the treaty requires parties to promote economically viable alternative livelihoods for farmers and workers and to protect the environment and the health of persons in tobacco cultivation and manufacture.
The Article 17 and 18 technical working group, which includes tobacco-growing countries,[link widoczny dla zalogowanych], was mandated to prepare a report on these matters; this progress report will be considered at COP4.