The Sri Lanka Medical Association (SLMA), the national medical association in Sri Lanka, has written to the Finance Minister with regard to the Budget Proposal for the Appropriation Bill 2018. The statement signed by the President of the SLMA Professor Chandrika Wijeyaratne under the heading ‘The Tax on Alcohol and Tobacco Products and the availability of Alcohol Products’ states as follows:
In its Budget proposal for the Appropriation Bill 2018, the Sri Lanka Medical Association says that prices of cigarettes and alcohol should be increased
No evidence anywhere in the world that tourists visit specific countries to consume alcohol; Even if it was the case, Sri Lanka should surely not aspire to be one of them
“The Expert Committee on Tobacco, Alcohol and Illicit Drugs of the Sri Lanka Medical Association (SLMA) recommends that the taxation and price of tobacco and alcohol products should be increased this year to further reduce the affordability of these products.”
One important consideration that is usually overlooked is that the majority of the adult population in Sri Lanka does not use tobacco or alcohol. Over 85% of adults do not smoke and over 80% of adults do not consume alcohol, according to the statistics of the Ministry of Health.
A study by the National Authority on Tobacco and Alcohol (NATA), SLMA and the World Health Organization (WHO) showed that the annual economic cost of tobacco and alcohol use was at least Rupees 209 billion in Sri Lanka. Therefore, in this case, a minority habit causes extensive economic and social harm to the entire population of the country. The only beneficiaries of this situation are the industries that produce and market these products.
The Expert Committee recommends that the price of such products should increase in view of the following reasons:
- Making alcohol and tobacco more affordable and available will lead to more young people taking up alcohol and tobacco and lead to more problems in society, an increase in health care bills and much suffering for individuals and their families.
There is no evidence anywhere that tourists visit specific countries to consume alcohol. Even if it was the case...should surely not aspire to be one of them... The “tourist industry” is another bogey by the industry, which seems to have misled several policy makers.
- Scientific research has shown that the overall consumption or the per-capita consumption (consumption per person) comes down with price increases. As per capita consumption is proportionate to the extent of alcohol and tobacco related problems in a society, a reduction in alcohol and tobacco related problems will be seen with reduced consumption.
- Econometric Studies also show that the tax increase will increase the government revenue at the same time. Agencies such as the World Health Organization strongly recommend increasing taxation to reduce harm and increase government revenue for both alcohol and tobacco. Both the tobacco and alcohol industries use the bogeys of “smuggling” and “increase” of illicit products and substitute products to mislead policy makers. There is no basis or sound evidence for these arguments, which are used by the industry lobby.
- There is also very strong evidence that increasing the price of cigarettes and alcohol will also prevent young people including school children taking up to cigarettes and alcohol.
- Both tobacco and alcohol are direct causes of poverty and poor health. It has been shown that the poor are the biggest beneficiaries of increasing the prices of these substances as they reduce their own consumption when the prices are increased. Therefore it is a pro-poor policy, not otherwise. The illicit trade should be dealt with by appropriate law enforcement and not by trying to compete by price.
It has also been recently announced in Parliament that the Ministry of Tourism was seeking the relaxation of laws restricting the availability of alcohol products, to make such products easily available for “tourists”,
There is no evidence anywhere in the world that tourists visit specific countries to consume alcohol. Even if it was the case, Sri Lanka should surely not aspire to be one of them.
The “tourist industry” is another bogey by the industry, which seems to have misled several policy makers. The effect of increasing availability of alcohol will simply increase the use of alcohol by Sri Lankans, not tourists.
There is ample evidence that increasing the availability of alcohol will not only increase its use, but also escalate social problems, such as domestic violence and other forms of violence and road traffic accidents.
The effects mentioned on the tourism industry seem irrelevant when it comes to the strata of tourists, who in fact bring in foreign currency. These tourists will anyhow stay in star class hotels and do have access to alcoholic beverages.
Hence, we strongly recommend increasing the tax on alcohol and tobacco products, taking into account inflation and affordability. The SLMA also requests the Government of Sri Lanka not to initiate any steps towards relaxing the licensing and other laws which will enable alcohol to be available and accessible easily.