ATAF New Initiative Targets Tobacco Taxation to Combat Public Health Crisis and Boost Revenue in Africa


JF-Expert Member
Mar 25, 2021
Dar es Salaam

Tobacco use, the leading cause of preventable deaths worldwide, continues to pose a significant public health challenge, claiming the lives of 8 million individuals annually, according to the World Health Organization (WHO).

In response to this crisis, the WHO Framework Convention on Tobacco Control (WHO FCTC) has advocated for price and tax measures as effective strategies to reduce tobacco consumption.
Recognizing the urgency of addressing this issue, a collaborative effort led by the African Tax Administration Forum (ATAF) and supported by the Bill and Melinda Gates Foundation (BMGF) has been launched to enhance tobacco taxation policies in Africa.

The newly launched tobacco tax project aims to tackle three main challenges: reducing tobacco-related mortality, enhancing domestic revenue mobilization, and aligning with global development goals. With 43 African countries having ratified the WHO FCTC, there is a clear commitment to utilizing taxation as a means to curb tobacco use.

One of the most compelling arguments for increasing tobacco prices through taxation is its potential to save millions of lives. A recent report estimated that a 50% rise in tobacco prices could prevent a staggering 27.2 million premature deaths globally over 50 years. This highlights the life-saving impact of robust tobacco taxation policies, reinforcing the urgency of action.

Furthermore, tobacco taxation plays a pivotal role in domestic revenue mobilization, particularly in Africa where the tax-to-GDP ratio is significantly lower than the OECD average. By optimizing tobacco tax policy and administration, African countries can not only generate much-needed revenue but also promote public health and economic development. The project aligns with the Sustainable Development Goals (SDGs) and the African Union Agenda 2063, which prioritize healthier lives and well-being for African citizens.

During a recent workshop in South Africa aimed at exploring the significance of tobacco taxation in generating domestic revenue, Mr. Antony Munanda, the Acting Senior Manager for Domestic Revenue Mobilisation at ATAF, emphasized that evidence supports the notion that increasing prices via taxation is the most effective strategy for reducing tobacco consumption. However, he noted that implementation of this measure has been sluggish in many nations.

Munanda highlighted the importance of this project for African countries, particularly considering the lagging tax-to-GDP ratio compared to global standards. He underscored that beyond financial benefits, the initiative aligns with Sustainable Development Goals and AU Agenda 2063, promoting healthier lifestyles for African citizens by encouraging positive behavioral changes through elevated tobacco costs.

“With the tax-to-GDP ratio in Africa trailing behind the global benchmarks, this project presents important opportunities for countries to consider. Beyond fiscal gains, the initiative aligns with Sustainable Development Goals and AU Agenda 2063, championing healthier lives for African citizens by influencing positive behavioural changes through increased tobacco costs”, Munanda highlighed.

The initiative, supported by the BMGF, underscores a shared commitment to promoting citizen welfare by reducing the negative impact of tobacco on public health while simultaneously increasing domestic revenue mobilization in Africa.

By addressing key policy and tax administration issues, such as developing effective tax structures and combating illicit trade, the project aims to create a more prosperous and healthier Africa.
The scope of the project extends beyond tobacco taxation, with plans to cover other harmful products such as alcoholic beverages and sugar-sweetened beverages under the excise tax regime. These efforts are essential for achieving the SDGs and Agenda 2063, as they promote positive behavioral changes and contribute to overall well-being.

Key activities of the project include research and analysis of existing tobacco taxation policies, capacity building through training programs and technical assistance, and knowledge sharing to disseminate best practices and lessons learned. By engaging stakeholders such as policymakers, tax administrators, and civil society organizations, the project seeks to foster collaboration and drive meaningful change.

Therefore, the tobacco tax project represents a vital step towards addressing the dual challenges of public health and revenue mobilization in Africa. By harnessing the power of taxation to deter tobacco use and promote economic growth, the initiative holds the promise of creating a healthier and more prosperous future for African citizens.

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.
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