Cambodia to Increase Tobacco Tax Rates in 2023

Draft Financial Management Law Proposes Higher Taxes on Tobacco and Beer, Receives Support from Health Advocates

According to the draft of Cambodia’s Financial Management Law for 2023, the government plans to increase tax rates on tobacco and beer starting in 2023 to boost national revenue. The proposed legislation also outlines a series of tax incentive policies, including measures to support the recovery of sectors affected by the pandemic, such as the tourism industry.

Tax Authority to Strengthen Collection Efforts in High-Potential Sectors

The Cambodian General Department of Taxation intends to strengthen tax collection and management in sectors with high revenue potential, such as construction, telecommunications, mining, beer, beverages, and tobacco. The tax authority also aims to improve the efficiency of value-added tax (VAT) collection on goods and digital services provided by e-commerce businesses and update information on tax-delinquent companies to enhance tax collection supervision mechanisms.

Public Health Advocates Praise Tobacco Tax Increase Proposal

Dr. Mom Kong, executive director of the Cambodia Movement for Health (CMH), expressed support for the proposed increase in tobacco product tax rates. He stated that raising tobacco taxes is a win-win policy that not only increases national revenue but also reduces public health service costs. Moreover, the number of people in Cambodia falling ill and dying due to tobacco products is expected to decline as a result of the tax hike.

A United Nations study suggests that if Cambodia raises tobacco product tax rates to 75%, the country could generate an additional $235 million in tax revenue over the next five years and $933 million over the next 15 years.

Overwhelming Public Support for Higher Tobacco Taxes

Raising tobacco product tax rates aligns with the will of the Cambodian people. Research conducted by the National University of Management in Cambodia reveals that 94% of Cambodian citizens support the government’s effort to increase tobacco product tax rates.

Approximately 15,000 people die each year in Cambodia from tobacco-related diseases, and Cambodians spend around $649 million annually on tobacco purchases, accounting for 3% of the country’s GDP.

Cambodia’s Tobacco Tax Rates Among Lowest in ASEAN

Cambodia currently has one of the lowest tobacco product tax rates in the ASEAN region, ranging from 25% to 31%. In comparison, Myanmar’s tax rates are as high as 50% to 60%, Singapore’s rate is 67.5%, Vietnam’s is 35%, and Thailand’s reaches 70%.

As Cambodia moves forward with its plan to increase tobacco tax rates in 2023, the government aims to strike a balance between generating additional revenue and improving public health outcomes. The proposed legislation has garnered support from both health advocates and the general public, who recognize the potential benefits of higher tobacco taxes for the nation’s well-being and economic development.

Cambodia Achieves Significant Reduction in Smoking Rates

A new study has revealed that Cambodia has made substantial progress in reducing tobacco use among its population. The National Adults Tobacco Survey 2021 found that the overall cigarette smoking prevalence decreased from 16.6% in 2014 to 13.04% in 2021. This decline was particularly pronounced among men, with a 6.93% decrease in cigarette smoking prevalence from 32.3% in 2014 to 25.37% in 2021. Women also experienced a reduction in cigarette smoking prevalence, from 2.4% in 2014 to 2.05% in 2021.

Dr Tara Singh Bam, Asia Pacific Director of International Union Against Tuberculosis and Lung Disease (The Union), attributed these positive results to the success of comprehensive tobacco control legislation and sustained whole-of-government efforts. The Union remains committed to partnering with the Ministry of Health and other national and international partners to promote tobacco control and ultimately end tobacco use.

Dr Chhordaphea Chea, Director of the National Center for Health Promotion at the Ministry of Health in Cambodia, emphasized that these survey results demonstrate that Cambodia is on the right track in tobacco control. He called for innovative efforts to further reduce smoking prevalence significantly.

Cambodian Public Supports Stronger Tobacco Control Measures

The survey also revealed that attitudes towards tobacco control are shifting among the Cambodian population. An overwhelming majority of respondents, 95%, supported an increase in cigarette tax, while 95.75% supported an increase in the price of tobacco products.

Raising taxes on tobacco products is a crucial measure because it leads to an increase in the price of tobacco products, making them less affordable. When tobacco becomes less affordable, people use it less, and initiation of tobacco use among youth also decreases. Youth and low-income groups are more responsive to increases in tobacco prices and disproportionately benefit from the health and economic advantages of quitting and not starting. Saving lives with tobacco taxes reduces the enormous healthcare burden and economic losses resulting from tobacco-related diseases. Tobacco taxation is also relatively inexpensive to implement and generates significant revenues over the short and medium term.

Smokefree Laws Reduce Exposure to Deadly Tobacco Smoke

The survey found that the number of people exposed to tobacco smoke has decreased dramatically between 2014 and 2021. Exposure to tobacco smoke at home declined from 66% in 2014 to 27% by 2021, while exposure at workplaces reduced by half, from 48% in 2014 to 24% by 2021.

However, despite smoke-free laws, exposure to tobacco smoke in public transport rose from 33% in 2014 to 62% by 2021, which is a concerning trend.

Cambodia ratified the global tobacco treaty (WHO Framework Convention on Tobacco Control) on 13 February 2006. Cambodian law prohibits smoking in all indoor workplaces and indoor public places. To effectively end tobacco use, smoking bans must be extended to outdoor workplaces and outdoor public places as well.

Smokefree laws and policies protect non-smokers from the life-threatening health hazards caused by secondhand smoke and thirdhand smoke. Evidence shows that smoke-free laws also encourage tobacco users to quit and prevent initiation of tobacco use.

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Matthew Ma

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