IT'S ILLEGAL

Tax holiday for nicotine pouches a dangerous idea

There's no evidence smokers who switch to alternative products can quit cigarettes

In Summary

•The most probable result is dual use of both cigarettes and the nicotine products or worse still a new nicotine user progressing to smoking in search of a stronger high.

•Nicotine pouches may also trigger some non-communicable diseases as it has been proven to narrow arteries and interfere with the blood flow.

Nicotine bags: Such addiction is a disease in itself.
Nicotine bags: Such addiction is a disease in itself.

In response to the global tobacco control efforts to fight the prevalence of tobacco use which results in more that eight million deaths annually, the tobacco industry is now pushing the agenda of introducing ‘less harmful’ products.

One such product which was introduced in 2019 by British American Tobacco Kenya (BATK) in the Kenyan market is the nicotine pouch known as Lyft. This product, which is being fronted by BATK as an alternative to smoking is unlikely to result in substantial health benefits to the Kenyan population.

Currently, Lyft is registered as a pharmaceutical drug under the Pharmacy and Poisons Board, a move that has the potential to dilute tobacco control efforts and move the focus from complete cessation to use of ‘safer’ products.

 

The fact that these pouches are being sold in almost all points of sale making them accessible especially to young people may be seen as a tactic by the industry to hook a new generation of nicotine users.

As if this is not enough harm to Kenyans, BATK is requesting for a tax holiday which it feels is justified by the size of direct investments expected from the local plant production and export market.

In agreement with Larry Summers, there is need to tax things that are killing us; those that are bad for our health, like tobacco and nicotine products.

Failure to tax such products, in this case the nicotine pouches, poses a great risk. To start with, there is no evidence to show that the smokers who have switched to use of alternative products have indeed been able to quit.

On the contrary, the most probable result is dual use of both cigarettes and the nicotine products or worse still a new nicotine user progressing to smoking in search of a stronger high.

This is because as they are currently packaged, the pouches are in different strengths from weak to strong and what is the end game when a user surpasses the strongest pouch? They stand the risk of using cigarettes to meet their need.

IILA

"Request for a tax holiday is an outright abuse of the international and national tobacco control laws."

This poses public health effects such as addiction which is a disease in itself and possible withdrawal effects while trying to quit in total in future.

 

Nicotine pouches may also trigger some non-communicable diseases as it has been proven to narrow arteries and interfere with the blood flow. It is also costly to fuel nicotine addiction and this may lead to socio-economic challenges both at the individual and national levels. At the national level, the pouches may increase the health care burden resulting from morbidity and mortality caused by use of nicotine.

Request for a tax holiday is an outright abuse of the international and national tobacco control laws. Under section 12 (a) of the Tobacco Control Act, 2007 the Ministry of Finance, now the Ministry of National Treasury and Planning is mandated to implement tax policies and where appropriate, price policies on tobacco and tobacco products so as to contribute to the objectives of the Act.

In the same manner, regulation 32 of the Tobacco Control Regulations, 2014 prohibits public authority from granting incentives, privileges, benefits or any other preferential treatment to the tobacco industry to establish, advance, or run their businesses.

Further, the regulations provide that such a public authority should be guided by the priority to tackle the adverse health, social, economic and environmental impacts of tobacco growing, manufacture, sale and consumption in Kenya while implementing investment and tax laws, and other polices related to tobacco.

All these provisions are in line with the guidelines for implementation of Article 5.3 of the World Health Organization Framework Convention on Tobacco Control, particularly, guideline 27 (7) which provides that tobacco industry should not be given preferential treatment such as providing partial or complete exemption from taxes.

The request is also one of the major tobacco industry interference tactics employed to weaken strong tobacco control policies─ exaggerating the economic importance of the industry.

While BATK is loud on the potential the nicotine pouch plant has to Kenya’s manufacturing and economic growth, it has chosen to completely ignore the economic drain that will be directed to cure the catastrophic consequences of the product. It would also be absurd if the tax holiday is granted at a time when the country needs all the revenue it can collect in order to respond to the current economic hardships brought about by the Covid-19 pandemic.

Although there are no laws in the country directly addressing the taxation and regulation of novel products by tobacco industry, the country should adopt the guidelines given by WHO of developing tax rates that are not far of from the traditional products in order to discourage initial and further use of these harmful products.

Celine and Elizabeth work for the International Institute for Legislative Affairs