GRANADA, Spain — Taxes on unhealthy products — tobacco, alcohol, and sugar — are among the most effective “best buys” advocated by the World Health Organization to reduce risk factors leading to noncommunicable diseases. With regard to tobacco, not only do taxes typically discourage smoking, leading to greater health benefits, but they can increase revenues diverted to health services. Successfully implementing such taxes, however, can be a major challenge — particularly for low- and middle-income countries.
Prior to 2008, Colombia had one of the lowest taxes on tobacco products in the region, and the rate of tobacco use — particularly among children between 13-15 years old — was one of the highest in the region. Fast forward to 2018, and tobacco use has dropped by 15 percent after the first year of the reform.
The Colombian implementation of tobacco tax is being held up as a success story. Yet the process of convincing and bringing together different sectors of government and the public to support higher tobacco taxes was an uphill battle involving multistakeholder cooperation — and a lot of trial and error. Colombia’s story is an excellent case study for stakeholders in other LMICs hoping to push through similar taxes.
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“Increasing tobacco taxes is a process that requires a lot of patience — it’s not something that happens in one month,” said Andrea Lara Sánchez, a political consultant who worked with the Colombian department of health to raise tobacco taxes. “It’s important to recognize that you’ll be successful sometimes, and you’ll fail sometimes, so it’s important to have realistic objectives and a long-term plan.”
Colombia’s battle against big tobacco began in 2008, when the country became a signatory to the World Health Organization Framework Convention on Tobacco Control. This entailed banning smoking in public places; banning tobacco advertising, promotion, and sponsorship; and mandating warning labels on tobacco packages.
While these measures were a good start, they did not significantly reduce the use of tobacco products. According to WHO, increasing taxes on tobacco products is one of the most effective ways of cutting down consumption: In LMICs, increasing the price of a pack of cigarettes by 10 percent can lead to a 5 percent reduction in demand. It also has the added bonus of raising revenue for other public health programs.
“Increasing tobacco taxes is a process that requires a lot of patience — it’s not something that happens in one month. It’s important to recognize that you’ll be successful sometimes, and you’ll fail sometimes, so it’s important to have realistic objectives and a long-term plan.”— Andrea Lara Sánchez, political consultant
But while the benefits of tobacco taxes are well established, so are the implementation challenges. According to Lara, one of the biggest and most immediate difficulties stakeholders faced was finding ways to overcome industry blowback.
“It was clear pretty quickly [the tobacco] industry wasn’t going to let tobacco tax pass quietly,” said Lara. “They fought every step of the way, starting with the claim that raising taxes on tobacco products would increase illicit trade.”
Since 2011, the tobacco industry has released the results of an annual smoking survey that is supposed to measure the size of illicit cigarette trade in Colombia, It claims that consumers will turn to illicit cigarettes in response to tax increases, so taxing cigarettes is an ineffective way of controlling consumption. The industry also hired some of the most well-respected Colombian economists to publish studies undermining tobacco taxes. According to Blanca Llorente, technical adviser to Anaas, an NGO that promotes sound public health policy, these surveys and studies initially exerted a lot of influence on policymakers.
“There was a lot of fear about illicit trade and this idea that tobacco smuggling would become unmanageable, and therefore tobacco taxes should be very gradual,” said Llorente.
“Part of the problem was the studies funded by the industries were the only ones — we knew their argument was probably not true, but we didn’t have any data to back us up at that time.”
Strategies that work
It became clear to Llorente that data were needed. Anaas immediately began the process of putting together a study to quantify the true volume of illicit cigarette trade in Colombia — the first of its kind not to be sponsored by tobacco companies. The study found that the share of the market occupied by illicit trade was only 3.5 percent for the five cities surveyed — much less substantial than the 14 percent claimed by tobacco companies.
In addition to this initial study, Anaas began collecting statistics on how much other countries taxed tobacco products, to demonstrate that Colombia was lagging behind.
“One of the first things I’d advise anyone hoping to pass tobacco taxes is to get your numbers right,” said Llorente. “You need to know your market, to do your homework so you can put together a convincing proposal to give to authorities, who are more than likely misinformed.”
Another key strategy is to assemble the right team. Tobacco taxes can be hard to pass because they involve so many different government sectors with competing interests and goals. Ensuring persuasiveness means understanding those goals and interests, and requires the expertise of many different types of people.
“We found that a comprehensive and really good team was essential,” said Pamela Gongora Salazar, who worked as an adviser to the Colombian minister of health and social protection during the campaign to raise tobacco taxes. “For instance, at the ministry of health, our team didn’t just include epidemiologists and doctors, but also economists, academics, and local civil society groups.”
It was also critical to get the ministry of finance on their side — which meant providing convincing evidence that tobacco tax had an economic benefit as well as a health benefit, according to Llorente.
“For tobacco tax to be passed, you absolutely need to partner with the ministry of finance. If they are not on your side, you will never in a million years get a tax increase,” she said. “No one is going to fight for you in Congress unless they see clear signs that the government wants this very badly.”
“One of the first things I’d advise anyone hoping to pass tobacco taxes is to get your numbers right.”— Blanca Llorente, technical adviser to Anaas
According to Lara, the fact that Colombia’s former Minister of Health Alejandro Gaviria Uribe was an economist rather than a doctor or medical professional helped a great deal in getting the ministry of finance on the same page. The technical strength of the ministry to mobilize other government departments to support tobacco taxes was key to its eventual success, she said.
“He had this open mind — he understood the importance of the economy as well as health, and was able to start a dialogue with the economists and policymakers in the ministry of finance,” said Lara. “Having this interdisciplinary perspective was really crucial.”
In addition to creating a strong local team, stakeholders also enlisted the support of major international organizations including the World Bank and WHO to boost their arguments for why tobacco taxes were a good idea.
“The [World Bank] really helped us get the message across to other stakeholders, by helping us to make the case that tobacco tax was not just important for health, but also for public finance. It gave us a lot of credibility,” Lara explained.
Enlisting public support
Merely convincing policymakers that tobacco taxes are a good idea is not enough: In order for taxes to be effective, the public needs to both be educated about the reasons behind the taxes, and supportive of them.
To do this effectively, stakeholders enlisted civil society organizations to help educate the public from the start. They introduced public forums, where civil society groups could debate with representatives from the tobacco industry publically.
“We found that pitting our experts against members of the tobacco industry was pretty effective, because our experts had all of this evidence, and the tobacco industry just had the illicit trade argument without any data or evidence,” said Lara.
Finally, they implemented a large-scale media campaign to educate the public about why tobacco taxes were important. Civil society members and representatives of the ministry of health wrote opinion pieces and appeared in radio interviews and television slots.
By harnessing the power of domestic media, Colombia successfully managed to pass fiscal reforms that tripled tobacco prices between 2017-2018, with annual adjustments for inflation. Still, Llorente says there is a long way to go.
“Increasing taxes by three-times sounds good. Before, we were the second-lowest price of tobacco in the region … but today we are closer to average in the region — but still much lower than Panama, Ecuador, and Brazil. We can still do better,” said Llorente.
“The good news is we know what works now. We know that it takes a village to raise a child — but I say it takes a village to raise a tax.”
For more coverage of NCDs, visit the Taking the Pulse series here.