Kazakhstan enacts big cigarette tax hike to discourage smoking

Parliament has enacted a 245 percent increase in Kazakhstan’s minimal cigarette excise tax to try to get more smokers to kick the habit.

The tax will jump 25 percent a year between 2011 and 2014 – from 20 percent a pack now to 49 percent in four years.

The tax increase and other steps have led to Kazakhstan become the leader in anti-smoking efforts among former Soviet countries. Last year parliament took the bold step of banning smoking in public places such as restaurants and bars.

Kazakhstan is hiking its cigarette tax in an effort to curb smoking

Kazakhstan is hiking its cigarette tax in an effort to curb smoking

Anti-smoking groups, health-care organizations and social-service organizations are happy about the tax increase, although it falls short of the 54 percent Russian levy and the 75 percent rate in many developed countries.

Senator Zhumabek Toregeldinov, who had wanted a larger increase, said he’s ready to introduce legislation to that effect in the next session of parliament.

“A pack of cigarettes of a leading brand in Russia costs $1.54, in Belarus $1.37 and in Kazakhstan only 95 cents,” he said.

Those three Customs Union countries will be aligning their tax regimes anyway when they create an economic common market in 2012, he pointed out.

“I am offering to further increase the excise tax rate to bring our rate closer to the Russian one,” Toregeldinov said.

Tax could result in a flood of knockoffs from China

Meanwhile, tobacco interests warned that if Kazakhstan’s cigarette excise tax becomes too high, knockoffs of famous brands will flood the country from Russia and especially from China.

Olzhas Bibanov, a spokesman for Japan Tobacco International, said neighboring China is not only the world’s largest consumer of cigarettes – 2.5 trillion a year – but also the biggest producer of knockoffs – 300 billion a year.

Kazakhstan’s market is 29 billion cigarettes a year. At the moment the Chinese don’t bother with it because the price of a cigarette in Kazakhstan is only 20 percent higher than in China, said Bibanov, who works for the world’s third-largest tobacco company.

When Chinese makers figure in transportation and distribution costs, their profit from selling in Kazakhstan is minimal.

But if a surge in Kazakhstan’s excise tax leads to a big difference between Chinese and Kazakhstan cigarette prices, the Chinese would find it worth their while to send knockoffs across the border, Bibanov suggested.

Tax demonstrates Kazakhstan’s commitment to anti-smoking efforts

The increase in the cigarette excise tax and other anti-smoking moves reflect Kazakhstan’s recent commitment to an international tobacco-control convention.

It was one of the first countries in the Commonwealth of Independent States to join the World Health Organization’s Framework Convention on Tobacco Control. It ratified the treaty in January of 2007, about four years after countries began signing the agreement in February of 2003.

The treaty, which 168 countries have embraced, is aimed at improving public health by taking steps to reduce smoking.

After Kazakhstan signed the treaty, parliament passed legislation to comply with many of its provisions.

It banned advertisements for tobacco products in 2007, for example. The ban applies both to ads in domestic media and to publications that are produced elsewhere but sold in Kazakhstan, according to Vice Minister of Information Nuray Urazov.

The Ministry of Health has also prohibited cigarette makers from using such terms as “low-tar,” “light,” “mild” or “soft” on cigarette packs. Those designations mislead smokers into thinking cigarettes are less harmful than they are, anti-smoking forces say.

Authorities are enforcing anti-smoking laws, although manpower is always a problem.

Many smokers, miffed about the ban on lighting up in public places, simply defy it.

Some start puffing in restaurants or bars. Sometimes the managers ask them to stop. Other times the mangers allow the smoking, apparently wishing to avoid a confrontation.

Kazakhstan’s ban on smoking in public places applies to outdoor as well as indoor areas, but some restaurants engage in wholesale defiance of the law in their outdoor dining sections.

A big restaurant that many foreigners frequent near Panfilov Park in Almaty opens a large outdoor dining area in summer. Every table has an ashtray on it, essentially inviting smokers to light up. In contrast, the indoor dining area lacks ashtrays.

When non-smokers complain about the haze wafting through the outdoor area, the restaurant staff ignores them.

In the first quarter of this year, however, police around the country issued citations to more than 5,000 people who were smoking in public places. They also cited 300 shops for selling cigarettes to minors.

And they cited the Burda-Alatau publishing company in Almaty for running cigarette ads in its publications. The company had to pay a fine.

Some want Kazakhstan to do more to curb smoking

Despite Kazakhstan’s steps to rein in smoking, participants at a lower house-sponsored round-table in May concluded that the country had yet to fulfill all its treaty obligations. The focus of the meeting was passing additional legislation to achieve full compliance.

The director of the World Health Organization’s Tobacco Free Initiative, Douglas Bettcher, would like to see Kazakhstan order tobacco companies to put photos of debilitating smoking-related health conditions on cigarette-pack covers. He thinks they would help many Kazakhs quit smoking.

Other countries have adopted the grisly-photo deterrent.

Bettcher said Kazakhstan was right in banning smoking in public places rather than allowing smoking and non-smoking sections in those places. “There should be a complete ban – one without any exceptions in the form of smoking rooms,” he said.

Bettcher said smoking has become a much bigger problem in the former Soviet Union in the past decade. One indication is that tobacco production in ex-Soviet countries has almost doubled since 2000, he said.

Cigarette consumption in Kazakhstan has risen to an average of eight per day per person, according to Dinar Nuketayeva, a member of the lower house, or Majilis.

More than 25,000 Kazakhs die each year from smoking-related illnesses, she said.

Bolat Sadykov, executive secretary of the Ministry of Health, said an alarming trend is that many Kazakhs get hooked young.

Fifteen percent of boys and 8 percent of girls are smoking by age 15, he said. He has heard of children as young as eight lighting up, he said.

Bettcher said smoking-related illnesses claim 5 million lives a year worldwide – more than malaria, AIDS and tuberculosis combined.

source: centralasianewswire.com

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