Is it difficult to answer why the Polish government does everything possible to make cheese, milk and vegetables cheaper than cigarettes? Ukrainians can take home from Poland healthy Polish products, while in return Ukraine sells cheap Ukrainian cigarettes to Poland.
Poles are lucky because the “father of Polish economic reforms, Leszek Balcerowicz, was well aware that life expectancy could be increased by policies which make healthy products like fruit cheaper and unhealthy products like tobacco more expensive. The way to do that is by increasing tobacco taxes.
High tobacco taxes not only improve a nation’s health, they also increase budget revenues. According to the State Tax Administration, the budget got Hr 11.5 billion in the first nine months of 2011, which is Hr 2 billion more comparing to similar period last year.
Tobacco tax increase in 2008-2010 showed that tax increase is profitable for state budget. The revenues from tobacco tax increased from Hr 2.5 billion in 2007 to Hr 13 billion in 2010!
Konstantin Krasosvky, the longtime tobacco control expert, says there is still a huge potential to increase tobacco taxes, because of the existing low prices of cigarettes.
It is important that not only ex-Prime Minister Yulia Tymoshenko’s government had a successful experience with increasing tobacco taxes. In 2010, the Azarov government initiated the next tax increase (from Hr 2 to Hr 3 per pack) and, as a result, tobacco tax revenues in 2011 have increased.
Yet, they promised to the transnational tobacco corporations that they would not increase tobacco taxes this year, nor are there official plans to do so in 2012. It seems that the specific tobacco tax could be only increased by inflation level or by Hr 0.2 per pack, which is not able to provide extra revenues in 2012. On the other hand, rather moderate tax increases, proposed by some members of parliament, could bring an additional Hr 2-3 billion next year. However, these proposals were ignored by the government. Why to look for reliable and healthy sources of money within the country, when it is easier just to ask the International Monetary Fund for another loan?
They seem to have already forgotten that the IMF recommended to increase excise taxes in Ukraine as a condition for loans.
Even the president’s declaration that tobacco control is a policy priority is having no effect. The administration doesn’t even seem persuaded by the fact that tobacco tax increases have decreased smoking rates in Ukraine. So if health and money don’t matter to the nation’s leaders, what does? It appears that the interests of the tobacco lobbyists have higher priority than national interests.
Hanna Hopko is the advocacy coordinator of the For A Tobacco-Free Ukraine coalition.
