ADIC fumes against Mangala’s proposal to license import foreign cigarettes to Sri Lanka

The Alcohol and Drug Information Centre Executive (ADIC) is opposing the proposal of Finance Minister Mangala Samaraweera to offering licensing to import foreign cigarettes to Sri Lanka. Following is the statement issued by ADIC Executive Director Pubudu Sumanasekara.

The aim of the Ministry of Finance in offering licensing to import foreign cigarettes to Sri Lanka must be to increase revenue for the country. If so, they can easily achieve this aim by applying a rational tax policy to the existing tobacco company. The incorrect and irrational tax system on tobacco employed by the Ministry of Finance currently is incurring a massive loss of revenue for the Government. According to calculations, the Government lost a hundred billion rupees over the last five years due to this incorrect taxation system. Therefore to increase the revenue, the best option for the Ministry of Finance is to impose a correct taxation system for tobacco. Further, as the current Ministry lacks competence to impose a rational taxation policy for the existing industry, it is very doubtful that they will do so for the new companies.

The Government invested a considerable amount of resources to prevent tobacco use over the last five years. This includes development of policies, formulating regulations, enforcement of existing laws and community level interventions. As a result, Sri Lanka shows positive change through declining tobacco usage over the last 14 years. It is evident that tobacco use causes and perpetuates poverty in developing countries and this decline in tobacco use means an economic growth in families of low socio-economic status. The new decision of importing foreign cigarettes will reverse all these positive changes achieved as a country. Even the World Bank discourages governments of developing countries to invest or give incentives for the tobacco industry as it negatively affects the economy of the country.

The National Authority on Tobacco and Alcohol (NATA) and the World Health Organization (WHO) calculated the direct and indirect cost of alcohol and tobacco for Sri Lanka in 2015 and it amounted to Rs. 210 billion. With this new move of licensing foreign cigarette imports, this cost will increase and the burden for the Government will be doubled. If the Ministry of Finance is thinking of increasing the revenue or real economic growth of the country, tobacco is not the answer. The result will be opposite.

The World Health Organization (WHO) developed the Framework Convention on Tobacco Control (FCTC) to curb the epidemic of tobacco use. One of the key reasons for introducing such a treaty is the economic problems caused by tobacco. Sri Lanka has signed and ratified the FCTC nationally and is gradually implementing the convention in a positive trend, but this new decision is completely against the recommended implementation of FCTC.

During the time when pictorial health warnings (PHWs) in tobacco packs were being applied, the country experienced the negative influence of the existing tobacco company. The existing tobacco company went against the Health Minister’s Gazette notification of imposing PHWs and delayed the implementation for three years. Therefore, it is evident that multinational industries influence the policy development of the country and opening the doors for new companies will only worsen the situation.

If the Government is thinking of the well-being of foreign workers in the country, the best course of action would be to help them to reduce and quit tobacco use. Giving a helping hand for a person who is addicted to such a lethal product must not be by facilitating to continue his addictive behaviour, but by creating an environment where tobacco use is discouraged. According to research reports, tobacco decreases productivity and causes premature death in the workforce. Therefore, human and people friendly governments should never provide facilities that encourage tobacco use. Existence of several tobacco companies will create an increased completion for the cigarette market and sales. This would inevitably lead to increased tobacco promotion tactics, increased intervention by the industry, attempts at using money to sway political power, investment of more money by the industry in election campaigns and illegal sponsorships by the industry. In an environment as such influence to start using cigarettes and other drugs (cigarettes act as a gateway drug to other drugs such as heroin and marijuana) will increase for children – the future of this country.

Evidence suggests one-third of cigarettes in the market are illicit cigarettes. This illicit cigarettes are another tactic used by multinational tobacco industries to evade taxes. In an environment as such is it possible to stop the increase of the illicit cigarette trade?

Majority of the major development projects are conducted through Chinese companies and Chinese aid. In this prevailing situation the Chinese Government possesses power to diminish efforts of applying correct taxes on Chinese cigarettes.

How appropriate is it to allow importing cigarettes from China in the guise of helping Chinese people working in Sri Lanka who are here for a short period of time and an extreme minority of the Sri Lankan population? If Chinese people demanded for more Chinese products will those companies also be allowed to import goods to Sri Lanka? Further if people from other nationalities also begin to make such demands is the Minister of Finance sensitive to those as well?

Decisions such as this taken by the Ministry of Finance without a long term vision negatively affects the health, social and economic development of not only Sri Lankans but also Chinese people. Therefore, we request all responsible parties to work towards changing this harmful decision.