Last week the Ministry of Health, allied with health experts and policymakers, called for an increase in the consumption tax on cigarettes. Their proposal was to have a flat-rate duty of VNĐ2,000 or US$.08 on a 20-pack of cigarettes.
To give readers some context, the health ministry called for a 100 per cent increase over what is being proposed by a draft law on Special Consumption Tax, which is to come into effect in 2020 and sets the tax at VNĐ1,000 or US$.044.
Taking into consideration other factors such as inflation, increase in income and purchasing power, the tiny tax proposed in the draft law is almost certainly doomed to fail its original purpose: to reduce the number of smokers. It is likely that by the time the draft law takes effect, a pack of cigarettes may cost less than what it does today in term of real purchasing power.
The proposal for a higher tax was a desperate call from the health sector, which has been struggling to keep up with the toll of tobacco abuse for years.
Nearly half of Vietnamese men—some 15 million people—are smokers. The country ranks among the world’s top 15 countries with the heaviest tobacco consumption, according to the Global Adult Tobacco Survey’s study. Among them, many are between 13-18 years old due to the relatively low price of cigarettes and the state’s failure to restrict the sale of cigarettes to minors.
An estimate by HeathBridge Canada, an international non-profit, non-governmental organisation, put the death toll for tobacco use in Việt Nam at 40,000 annually, roughly four times the number of people killed in traffic accidents in the country.
While great effort is being invested to lower the number of traffic accidents, not much is being done to prevent tobacco use, which is even deadlier.
There may be an explanation for that. Traffic accidents are graphically visible while patients dying on sick beds due to either smoking or second-hand smoking are hardly front-page material. The silent killer goes unnoticed.
Unless one has been living under a rock, in this day and age it’s easy to learn about all the adverse health effects that smoking may cause to one’s health; there have been numerous studies on how smoking may result in lung and throat cancers, heart complications and respiratory diseases.
However, the above-mentioned health risks don’t hold much sway in a smoker’s decision to continue the deadly habit, as the death caused by smoking is a slow one. Hitting their wallet seems to do the trick, though, as for every 10 per cent increase in the price of cigarettes the number of smokers decreases by 4 per cent in developed countries and 5 per cent in developing countries.
There are many successful examples of schemes in which countries managed to significantly bring down the number of smokers, most notably Australia where a pack of cigarettes may cost to up US$18. A report by the Australian Institute of Health and Welfare in 2016 found smoking had decreased by almost 50 percent in the past 20 years.
The Vietnamese tobacco industry never seems to fail in reminding the public that it is a large contributor to the State’s budget. What they do not tell you is how much larger are the medical bills we, as a society, are paying for smoking.
A report by 1,200 hospitals across the country in 2014 showed not only that smoking-related illness were crushing the health sector, but also that the cost of treatment for patients was estimated at over $1 billion dollars, or 0.55 per cent of the whole country’s GDP that year (US$186 billion).
World Health Organisation experts said the health and social toll of tobacco use may take up to 20-25 years to manifest in full form. If the health sector is being overwhelmed today as the result of the 1 billion packs of cigarettes consumed annually in the 1990s, then what nightmarish future awaits us in the next decades to come when 5 billion packs were consumed in 2013.
Researchers also pointed out that smoking is especially rampant among the poor. The money they spend on cigarettes could have brought food and education. Later, smoking-related diseases may bankrupt their financial savings, creating a never-ending loop of poverty and sickness.
Despite all that, the tobacco industry still can count on very powerful friends. The Ministry of Industry and Trade is the stoutest of its defenders. Almost without fail, the ministry will counter proposals to increase taxes on tobacco use with its fear of increased cigarette smuggling, even though studies on other countries in the ASEAN region such as Singapore and Thailand have shown little connection between higher taxes and increased smuggling.
Even if the ministry’s logic was with merit, by its own calculation, losses to State’s budget caused by cigarette smuggling amount to VNĐ6,000 billion ($263 million) a year, a fraction of the medical bills incurred by smoking-related illness. From an economic point of view, the logical conclusion here is that we should prioritise reducing tobacco use.
Yet the ministry stands with the tobacco industry anyway. As of now, the trade ministry is a major stakeholder of the Vietnam National Tobacco Corporation (VINATABA), which holds over 60 per cent of market share for tobacco products in Việt Nam. This double role of the trade ministry as a government executive body and a major corporation’s stakeholder leads to a potential conflict of interest with regard to policymaking.
VINATABA’s roster includes a number of local/regional tobacco companies located in different provinces. Not unlike the trade ministry, provincial governments are walking a tightrope: they must weigh tobacco firms’ contributions to provincial budgets and employment for locals against the health benefits of sterner measures to reduce smoking in their provinces.
Simply take a walk around the country’s major cities and the failure of our tobacco prevention programme is evident. One will almost choke on the smell of cigarettes in crowded cafés, restaurants, public transport and even government offices. It is a disturbing thought that we are all, our children included, victims of second-hand smoking on a daily basis.
At this rate, Việt Nam’s ambitious goal to reduce smoking to 39 per cent among men by 2020 is increasingly unlikely unless the Government acts fast and acts now. Public health should not be treated as an economic equation and our policies on the use of tobacco should clearly reflect that. — VNS