Regular and E-cigarettes used in the country are mostly illicit, making it difficult to tax them as part of efforts to cut tobacco consumption, a new survey shows.
Conducted by the Aga Khan university's Brain and Mind Institute in conjunction with the National Taxpayers Association (NTA), the report shows there is a disparity between taxes and product's trading price.
It says the supposed tax on nicotine, the chemical in tobacco that keeps people smoking, is more compared to the product’s trading price, which should not be the case.
“Trading price of a 50mg of nicotine liquid is Sh1,500 while tax on nicotine is Sh70/mg. Therefore, tax per 50mg is Sh3,500,” the report reads.
“It therefore depicts malicious trading, as the tax is more than the trading price instead of the tax being a proportion of the trading price.”
Speaking while presenting the research findings in Nairobi on Tuesday during the annual tobacco taxation conference, Cyprian Mostert, the lead mental health economist at the Brain and Mind Institute, said the trading price being less than tax means the product is illicit.
A corresponding survey run by the Research Unit on the Economics of Excisable products, shows if no immediate actions are taken to avert the scenario, cigarette consumption in the country could go up by about 1 trillion sticks by 2025 to eight trillion.
This is from the average seven trillion sticks last year.
However, it says the consumption could reduce to about 5.8 trillion within the three years if quick and thorough tax interventions are enforced.
A single smoker in the country uses averagely 12 sticks a day.
Commenting on e-cigarettes, which have a 5.8 per cent prevalence rate, and currently widely used by Gen Z aged between ages 11 and 26, Mostert says the taxes charged are still very low to reduce affordability.
Generation Z attributes 53 per cent and millennials 44 per cent of total prevalence. Baby boomers attribute three per cent, the report reads in part.
“Nicotine pouches are mainly sold in convenience stores and are used by children and youth. For instance, the trading price of 10mg of nicotine pouches is Sh350 while the equivalent tax is Sh1,595 per kg (1.595 per gram) therefor, tax per 10mg is two cents,” he said.
“This is too low to make a meaningful contribution in consumption.”
According to NTA's chairman Peter Kubebea, despite the progress made in global recognition of the importance of tobacco control in the development agenda and public health protection, new tobacco control challenges are constantly arising which include tobacco industry interference.
