The Conference of the Parties (COP) to the World Health Organization’s Framework Convention on Tobacco Control (FCTC) yesterday hurriedly adopted behind closed doors guidelines on tobacco-product price and tax measures, further demonstrating the FCTC’s habit of infringing on issues of national sovereignty, according to a press note from Japan Tobacco International.
COP6 is being held in Moscow this week.
“Public health authorities are not fiscal experts”, said Michiel Reerink, global regulatory strategy vice president at JTI. “Yet, one-size-fits-all decisions were rushed [through] in the absence of a vast majority of governments’ taxation experts, who should have the last say on their individual fiscal policies.”
The press note went on to say that the COP had once again shown a complete lack of respect for several Parties by blatantly ignoring their wish to express reservations about the guidelines, particularly those regarding the minimum benchmark tax of 70 percent and the allocation of tax revenues to finance tobacco control programs. Two years ago, at COP5 in Seoul, Korea, Parties had adamantly opposed the same recommendations. Despite this, the draft guidelines presented in Moscow were largely unchanged and adopted at record speed.
“While the guidelines are not binding for governments, ministries of finance will be under pressure to adopt them in their national law” said Reerink. “Yesterday’s decision not only represents an alarming attempt to erode countries’ sovereignty on taxation policies, but also violates COP6’s own requirement to make ‘every effort’ to reach agreement by consensus.”
When making decisions on tobacco tax policies, countries take into account a number of considerations: income growth developments, the impact of price increases on the affordability of tobacco products, the existence of illegal trade (and tax authorities’ ability to enforce compliance), inflation and regional sensitivities such as cross-border trade.
“Tax experts around the world recognize that ignoring these considerations is counterproductive and could lead to serious consequences, including a major increase in illegal trade, depriving governments of important tax revenues and undermining other government policy objectives – including public health”, said Reerink.
JTI reported that during the October 15 vote on FCTC’s Article 6, the public and the media were once again locked-out from the proceedings. It said, too, that there was a last minute decision to cancel press briefings.