* BATU continues to emphasise smuggling as a reason for not increasing excise duty on cigarettes in Uganda’s June 12 budget (e.g. its Company Secretary, Mr Isaac Ampeire in the Red Pepper 4 June P18). The Tobacco or Health Forum strongly disagrees with Mr Ampeire. Please find attached the Framework Convention Alliance (FCA) Factsheet on tobacco smuggling. The FCA is an international organisation which assists countries with carrying forward the WHO’s Framework Convention on Tobacco Control (FCTC), the global public health treaty ratified by Uganda in June 2007. Below are some quotes from the Factsheet.

TAX DIFFERENCES SMALL PART OF PROBLEM

* "Smuggling is widely misunderstood to arise from exploitation of tax differentials between countries, but this is a relatively small part of the problem and much less profitable to the smugglers. In fact, if all countries had exactly the same price and tax structure, smuggling would continue on a similar scale."

TOBACCO INDUSTRY INVOLVEMENT IN SMUGGLING

* "The tobacco industry {around the world} argues that high tobacco taxes are the primary cause of tobacco smuggling ….however, smuggling occurs in all parts of the world, even in regions where the taxes are low. The reality is that price is only one of the many factors that influence smuggling. Others include: Tobacco Industry Complicity ..." ..."Tobacco manufacturers and wholesalers gain from smuggling in several ways ..."

POLICYMAKERS SHOULD NOT GIVE IN TO TOBACCO INDUSTRY’S EXPLOITATION OF SMUGGLING FEAR

* "Smuggling - and the fear of it - has become the greatest impediment to raising tobacco taxes worldwide. The tobacco industry has successfully exploited this fear, convincing policymakers around the world that virtually any tobacco tax increase will spark uncontrollable smuggling, resulting in lost government revenue….Yet out of hundred of tobacco tax increases successfully implemented in the world, there are very few cases in which a smuggling problem developed that was large enough to cause a government to reduce taxes."