Tobacco legislation: The economics behind it

We are living in a globalised age, where the world’s knowledge and scientific prowess to quantitatively determine the economic and societal goods for mankind’s benefit have accelerated tremendously. It is against that backdrop that various nations and States have taken a structured and economic approach in dealing with social issues. Smoking is one such issue.
Smoking of tobacco (cigarettes) was once a pastime stratified only to the elites and was one of the precious commodities that drove the Triangular Slave Trade during the period of colonisation. As the world moved away from imperialism and towards capitalism, tobacco became more mainstream and accessible to the masses. So much so that it became a multibillion-dollar industry.
Its proliferation has since slowed with the colossal flooding of empirical information attesting to the devastation that smoking causes to one’s health, primary of which is death.
According to the Pan American Health Organisation (PAHO), each year, tobacco smoking kills six million people: 5.4 million active smokers and 600,000 non-smokers exposed to second-hand smoke. It is the single legal consumer product that kills up to half of its users when used exactly as intended by the manufacturer, costing the global economy an estimated US0 billion each year.
It is for this reason that international organisations and unilateral bodies have called for stricter legislation to be implemented by host countries to control and suppress smoking of tobacco.
Last year, PAHO made calls for Guyana to pass tobacco control legislation, citing it as a top priority.
The Health Organisation had posited that the legislation was intended to protect present and future generations from the “devastating harms” of tobacco use, exposure to tobacco smoke and specifically to prevent tobacco use among youths.
The Guyana Government intends to table the tobacco legislation soon in the National Assembly, thereby paving the way for its execution which is intended to institute a host of stringent measures such as restrictions on advertisement, promotion and sponsorship, a ban on displaying tobacco products, a proposal to increase graphic health warnings to 75 percent of the packet, putting mechanisms in place to ensure that the drug is not readily available for purchase in an instant and altering the age requirement for persons to purchase the drug, among others.
The Government should be commended for accelerating the passage of this legislation.
The argument does not end here, however; smoking, for all its ills, is being vigorously defended by some. The producers of this nefarious product are still benefiting tremendously from cigarette sales, even though many countries have increased the excise tax on the sin good in an effort to prevent the masses form using it. A tactic which has since been successful and should be implemented by our Government.
This heavy taxing of the product has invariably led to economic prosperity for countries as the revenues generated have increased exponentially. There is also the creation of jobs that come with the proliferation of such a business. So, some argue that tobacco is an economic tool for growth especially in developing countries.
While that may be true, empirical information has shown that while revenue earnings have increased with tobacco, significantly more is lost in the health-care sector with Governments spending billions on patient care for tobacco users.
However, there are those who still argue from an economic perspective that the revenues collected from the taxing of cigarettes will be lost if tobacco control legislation is enforced.
They should consider this, according to Health and Wellbeing writer Bryan Clark: “During the first 15 years of the Tobacco Control Programme in California, which cost in the region of US.5 billion, the savings made in direct health-care costs amounted to US billion. Read that sentence again. The US.5 billion spent on tobacco control in California has resulted in savings in excess of 60 times that sum. If you wish to make the argument that your smoking is doing good by way of taxes, then think again. During those 15 years, roughly 3.6 billion packets of cigarettes that would otherwise have been smoked were not. The loss in tax revenue amounted to little over US billion, less than three per cent of the total health-care savings.”