Health organizations today released a brief recommending higher federal
tobacco taxes. The news release in English and French is below. A pdf
version of the report can be found at this address:
http://www.nsra-adnf.ca/DOCUMENTS/PDFs/taxreport2004.pdf
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Attention News/Health Editors:
Health Organizations Urge Finance Minister Ralph Goodale to Close Loophole
for Roll-your-own Tobacco, Increase Cigarette Taxes
OTTAWA, Jan. 14 /CNW/ - National health organizations today released
a report to federal Finance Minister Ralph Goodale urging him to close
a loophole that allows roll-your-own tobacco to be taxed at one-third
the rate applied to cigarettes. The organizations also recommended a Canada-wide
tax increase of $5 per carton of 200 cigarettes.
"Higher tobacco taxes are a highly effective means of reducing smoking,
especially among teenagers, while at the same time increasing government
revenue," says Rob Cunningham, Senior Policy Analyst at the Canadian
Cancer Society. "Implementing the recommended tax increases would
reduce the burden of tobacco-caused disease, including cancer,
heart attacks, strokes and emphysema."
The tobacco tax recommendations
would increase federal government revenue by an estimated $930
million per year, and even more if GST were counted. "This
new revenue could be of crucial benefit as Minister Goodale considers
possible expenditure cuts and new program priorities in his first budget," says
Neil Collishaw, Research Director at Physicians for a Smoke-free
Canada.
The health organizations emphasize action is needed on roll-your-own
tobacco, which is taxed at a much lower rate than a comparable quantity
of cigarettes. Tax rates for roll-your-own are based on the outdated notion
that
1 g of tobacco is
needed to make one cigarette. Tobacco companies have "puffed
up" tobacco so that today as little as 0.45 g is needed to roll one
cigarette.
Roll-your-own cigarettes
are increasing in popularity due to this tax loophole and now comprise
a significant 11% of the Canadian tobacco market. "There
is no justifiable reason why roll-your-own tobacco should be taxed at
a lower rate than manufactured cigarettes," says Francis Thompson,
Policy Analyst at the Non-Smokers' Rights Association. "The federal
tax on 200 cigarettes is $15.85, but the tax on 100 g of roll-your-own
tobacco, enough to make 200 cigarettes, is only one-third this
amount, at $5.40. This loophole impedes health and revenue objectives
and should be closed immediately."
The health organizations are also recommending:
- closing another
loophole that allows a product known as "tobacco
sticks" to be taxed at a lower rate than cigarettes;
- ending the income tax deductibility of tobacco advertising and promotion
expenditures;
- increasing the surtax on tobacco manufacturer profits.
Tobacco use is the leading preventable cause of disease, disability and
death in Canada. Almost 48,000 Canadians die each year because of tobacco
products.
Youth are among the most likely to benefit from the tax increases. Teens
and pre-teens are among the most price-sensitive smokers, therefore a
significant tax increase on cigarettes would undoubtedly lead to fewer
of them becoming addicted to this deadly product in the first place. The
overwhelming majority of smokers begin as teenagers or pre-teens. Since
one-half of all lifetime regular smokers will die from tobacco-related
diseases, the government has a fundamental responsibility to do all it
can to prevent children from starting to smoke.
Both the World Bank and World Health Organization recommend high taxes
on cigarettes to help curb consumption. High prices motivate smokers to
quit or reduce the amount they smoke.
The report, entitled "A Win-Win: Enhancing Public Health and Public
Revenue", is endorsed by the following organizations: Canadian Coalition
for Action on Tobacco, Action on Smoking & Health, Canadian Cancer
Society, Canadian Council for Tobacco Control, Canadian Dental
Association, Heart and Stroke Foundation of Canada, Non-Smokers'
Rights Association, Ontario Campaign for Action on Tobacco, Physicians
for a Smoke-free Canada, Coalition
québécoise pour le contrôle
du tabac, and The Lung Association.
The full report is available on-line at http://www.nsra-adnf.ca .
For further information:
Francis Thompson, Non-Smokers' Rights Association, (613) 230-4211, cell.
(613) 355-6532; Rob Cunningham, Canadian Cancer Society, (613) 565-2522,
ext. 305; Maurice Gingues, Canadian Council for Tobacco Control, (613)
567-3050, ext. 329; Neil Collishaw, Physicians for a Smoke-free Canada,
(613) 233-4878; Louis Gauvin, Coalition québécoise
pour le contrôle du tabac, (514) 598-5533
