The African Tax Administration Forum (ATAF) has introduced a new project which seeks to improve tobacco tax policy and administration in order to boost Domestic Revenue Mobilisation (DRM).
With African Tax Outlook revealing a lower tax-to-GDP ratio in Africa compared to other regions, ATAF bears the sentiment that improving tobacco tax policy and administration can boost DRM without causing economic distortions or burdening taxpayers.
Tobacco tax covers all the taxes applicable to tobacco products and the tobacco industry including indirect taxes such as excise taxes, value added taxes, customs taxes, other levies, and direct taxes such as income taxes.
Of the different types of taxes levied on tobacco products, excise taxes have the most significant impact on the prices of these products and hence have the potential to have more impact in
domestic revenue mobilisation as well as health. As such, significant attention has been given to excise taxes.
Through the project, which is supported by Bill and Melinda Gates Foundation, ATAF is also looking to fulfill Sustainable Development Goal 3 (SDG 3) of promoting healthy living for African citizens, by potentially driving positive behavioural changes through increased tobacco costs.
The tobacco tax project aims to deliver expert guidance and foster skill development in African nations, enabling them to devise and execute effective tobacco tax strategies. By engaging key stakeholders such as policymakers, tax administrators, and civil society organizations dedicated to tobacco control, ATAF will collaboratively work towards creating a more prosperous and healthier Africa.
The project will address key issues including the development of effective tax structures, tax rates and other tax policy related issues, new and emerging tobacco and nicotine products and illict trade.
Tobacco taxation has been a global agenda for a long time, mainly because tobacco is the leading preventable cause of death in the world. Estimates from the World Health Organisation reveal that tobacco use is responsible for causing 8 million deaths every year and causes more disability and ill health than any behavioural risk factor.
