Kenya's current cigarette excise tax policy is failing to reduce cancer-related mortalities, underlining the need to reform it.
For example, between 2015 and 2022, deaths from lung cancer increased by 24 percent despite various tax measures to discourage smoking.
The government needs to implement progressive tax legislation that requires the tobacco industry to explain and accept responsibility for its role in worsening cancer rates.
As it stands, the cigarette excise tax policy is not effective in reducing cigarette consumption. For instance, a smoker's daily cigarette consumption in 2000 was 10.3 sticks.
This figure rose to 12 sticks in 2012 despite the existence of the cigarette excise tax policy.
The lobbying power of the tobacco industry is responsible for blunting the effectiveness of the cigarette excise tax policy. In 2008, the share of taxes on tobacco's retail price was greater than 75 percent in Kenya.
The tobacco industry pushed back against this tax by interfering with the political process to improve taxation. Hence, the share of taxes on tobacco's retail price fell from 75 percent in 2008 to 23 percent in 2020.
Unsurprisingly, tobacco consumption and deaths from lung cancer remain stubbornly high and are increasing.
Currently, Kenya collects Sh12 billion of excise tax from the tobacco industry. On the other hand, our government spends Sh15 billion trying to reverse tobacco-related conditions.
The industry is holding on to Sh19 billion annually by refusing to pay the fair tax advocated by the World Health Organisation.
This economic vandalism is unacceptable, considering that new cancer cases are expected to rise by more than 120 percent over the next two decades, partly driven by tobacco consumption.
The current estimates show that the cigarette product market's revenue will be $815 million in 2023. This revenue is expected to grow annually by two percent until 2027.
Our government must make the tobacco industry account for these public health violations. For example, Kenya ranks high among African countries with a low tobacco excise tax.
Hence the expansion of the industry to new-generation products such as modern oral nicotine pouches.
The industry deceives the public by claiming that modern oral nicotine pouches are a safer alternative to combustible cigarettes.
So far, no independent study in Kenya has confirmed this claim. Policymakers must avoid falling into a trap by mindlessly believing the tobacco industry's statement – without conducting a proper independent investigation into the impact of oral nicotine pouch use on public health.
It is clear that the industry is unwilling to pay an appropriate tax on these products. Some industry leaders have told the Kenyan Government that modern oral nicotine pouches are reduced-risk products compared to cigarettes.
Therefore, any potential excise tax paid on them should be lower than the lowest tax tier for cigarettes.
The government must reject this narrative. According to the World Health Organisation's Global Nicotine Reduction Strategy, nicotine exposure can harm the brain in ways that may permanently affect adolescents' neurological development and mental health.
Furthermore, early exposure to nicotine is associated with more severe dependence, which suggests that the developing brain may be more susceptible to permanent addiction.
Given this evidence, there is a case for reforming the cigarette excise tax policy in Kenya to cover nicotine pouches with aggressive tax measures. More countries are exploring this option.
The tobacco industry cannot be trusted- it has a reputation for being a dishonest partner in our quest to improve public health outcomes.
For example, the tobacco industry has previously claimed that vaping and smokeless tobacco were effective tools to stop smoking.
We now know these claims are untrue; the industry promoted these products to maximise profits. Therefore, the government must act urgently and in unity to reform Kenya's cigarette excise tax policy.
Nicotine pouches should be approached with an aggressive tax policy so that the share of taxes in the retail price of these products, as well as that of cigarettes, is greater than 75 percent – lest we repeat the mistake of trusting the industry with our health.
The writer is the Chief Health Economist & Assistant Professor of Global Health Economics at Aga Khan University’s Brain & Mind Institute.
