Raising tobacco taxes can boost government revenue and curb smoking-related diseases, according to a World Health Organisation (WHO) official. 

Yel Daravuth, a WHO technical officer, noted this in a December 19 roundtable discussion on tobacco tax measures, held at the Royal Academy of Cambodia (RAC) in Phnom Penh. 

The forum, attended by experts, researchers and representatives from various organisations, addressed the resistance from tobacco companies. 

Daravuth pointed out that these companies often employ misleading tactics, such as spreading disinformation about tax increases leading to tax evasion that would in turn only affect lower-income smokers and result in a loss of tax revenue and job losses.

Brushing off such claims, he said: “In terms of tax burden, Thailand and the Philippines stand at 78 per cent and 71 per cent, respectively, boasting the lowest tax evasion rates in ASEAN at 5.5 per cent and 6.5 per cent. The correlation between cigarette tax hikes and illegal cigarette smuggling is weak; rather, it hinges on the governance practices of each country’s authorities. Conversely, countries with effective tax collection governance do not experience a decline in tax revenue after a tax increase.”

Noticing that people’s ability to afford cigarettes remained high, Daravuth observed, certain companies pre-emptively raised cigarette prices six months before the tax hike.

According to the Southeast Asia Tobacco Control Alliance (SEATCA) analysis, this pre-increase pricing strategy led to an extra profit of approximately $8 million for locally produced cigarettes.

Mom Kong, executive director of the NGO Cambodia Movement for Health, also said that research from the Ministry of Health and WHO indicates 94 per cent support for raising tariffs on tobacco products, with only six per cent opposing.

“Cambodia maintains a low tax burden on tobacco products, with domestic cigarettes at 25 per cent and imported ones at 31 per cent of retail prices. This affordability prompts young people to start smoking and encourages existing smokers to smoke more,” he said.

Ky Sereyvath, director-general of the Institute of China Studies at the RAC, discussed a shift in the tobacco environment for young people, moving from smoking to vaping. This trend may impact their health and hinder the growth of life expectancy in the general population.

“Another noteworthy observation is that the cost of health services becomes a significant burden on the government when people suffer from smoking-related diseases. This adds pressure to the government’s expenses, which rely on policies to increase public expenditure annually,” he said.

A global economic study suggests the average life expectancy is 45 to 65 years. If the population’s average age is only 67, it raises concerns about illness and death during potential high-income years.

According to WHO, tobacco-related diseases claim 15,000 lives yearly in Cambodia. These include stroke, coronary heart disease, respiratory infections, chronic obstructive pulmonary disease (COPD) and lung cancer. Notably, 33 per cent of these deaths occur in the lowest-income bracket.

In addition, tobacco use results in a yearly economic loss of $649 million, equivalent to three per cent of Cambodia’s GDP, it said.