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Posts Tagged ‘cigarettes tax’

Teens Sensitive to Cigarette Tax Increase, USA

Wednesday, September 12th, 2012

cheap karelia cigsHere’s hoping Kentucky shared in the national decrease in teenager smoking habit found recently by the U.S. Centers for Disease Control and Prevention. USA Today attributes an “historic decline in smoking tobacco,” not just among teenagers but across all age groups, to a 62-cent raise in the federal cig tax in 2009. Increasing the federal tax to $1.01 a package has brought in almost $30 billion in new income to the U.S. revenues. Meantime, some 3 million fewer Americans smoked in 2011 than in 2009, even though the inhabitants has increased. USA Today credits the federal cigarette tax hike with restarting a long-term decrease in smoking habit that had delayed.

Kentucky also raised its cigarette tax in 2009. But instead of the 70 cents proposed by Gov. Steve Beshear, the legislature wimped out and enforced only a 30-cent per package increase.

At 60 cents a package, Kentucky’s cigarette tax remains well below the national average of $1.49 and is lower than four of our seven surrounding states.

That’s a big part of why Kentucky nearly always leads the nation in percent of smokers, both adults and teens, and why pregnant Kentuckians smoke at double the national rate.

Smoking rate takes a very serious cause on Kentucky’s health and state economy. Almost all smokers start smoking habit by age 18, and teenagers are especially sensitive to increases in the cigarettes prices.

Cigarettes Tax Increase Causes Low Goods

Friday, June 15th, 2012

cheap virginia cigaretteCigarettes inventory is low across the state of Illinois, and one organization said that it comes from a combination of clients supplies and the state holding back on cigarettes stamps ahead of a new tax hike. Customers are stocking up on tobacco products, purchasing extra packages and cartons before the price raised. “It’s a man that usually buys one carton,” William Fleischli, Vice President of the Illinois Association of Convenience stores told the State Journal-Register. “Now he wishes to purchase two or three cartons, trying to save in this way $18 or even $20.”

Fleischli argued that the state of Illinois is holding back on the tobacco sale of tax stamps, which are required to trade cigs at retailer.

“They’re also restricting the sale of a product in expectation of a product going up in price,” he added. “They’re going to gain because the price increased.”

The Department of Revenue spokesman Greg Rivara debated that claim and said stamp availability was raised by 25 per cent.

The state department is not permitting shops to buy more than their average number of stamps for this time of year, but the 25 per cent increase was proposed for the seasonal rise in smoking tobacco and the influx of those trying to detour the tobacco tax increase, the State Journal-Register reported.


Cigarettes Taxes Proposed in Danville

Wednesday, June 13th, 2012

buy gauloises cigarettesSome smokers think the price for a package of cigs is high, but that price may be getting worse in Danville. This week, the city manager proposed 30 cents per packaging tax increase that would be included in next year’s budget. Approximately every city in the state has cigarettes tax, but Danville’s not among them. The state budget there has become so compact that officials are saying this may be the only new option.

“It should stay at the same tobacco price it’s at because everything is so high, why go up on cigs too?” declared smoker Belinda Fitzgarald.

The average cost per package in Danville is almost $4, and with an extra tax proposed on top of that, some smokers aren’t pleased.

“Cause they know they are addicted to tobacco smoking, so they keep increasing the price higher and higher,” explained Fitzgarald.

“Some persons smoke, other persons don’t. But also some of them eat in restaurants, other people don’t. We have taxes on restaurants and hotel rooms, and cigs would fall into that category,” added Joe King, the Danville City Manager.

City income is slim, and officials think it’s about favorable time smokers to start paying for their smoking habit.

“It’s very important for cities to have sources of income that produce ongoing… not just one time revenue sources, but every year,” reported King.

Thirty of 39 cities in Virginia tax cigs, but Danville isn’t one of them. Officials argued that they’ve already made too many cuts to the budget. The only answer now without raising property taxes is cigs.


Tobacco Business Worry, Cigarette Taxes

Thursday, April 19th, 2012

tax free camel cigarettesNeighbors in the town of Bridgewater are keeping a close on eye on new tobacco products taxes that they will pay soon. The cigarettes tax is the most disputable proposed tax and small tobacco business owners are not happy about the new changes. As John Marklin, the co-owner of Bridgewater Food Supermarket, stocked the cigs at his shop, he was reminded of a 20-cent tax that may soon be added to cigarettes prices. He is afraid that because of it he will lost the customers.

“We have positive experience in knowing, that when you do have a tax like this, it will eventually reduce Camel cigarettes sales. As a retailer, we are always interested about that,” declared Marklin.

As town leaders reported at Tuesday’s public hearing, they want to make this easy on their citizens. With a cigarette tax, they can get more and more money off of clients.

“Not every tax do we want paid by the inhabitants of Bridgewater,” explained Superintendent of the Town of Bridgewater Bob Holton. “We desire some of the taxes paid by those coming through the town, who use our streets, use our parks, use our town services.”

That still interests small tobacco business owners. A lot of times when clients walk into a shop, they are looking to purchase not just cigs, but other objects as well. What shop owners are worried about is if there is a tax on their tobacco product, clients will head elsewhere and they will not visit Bridgewater Shops to purchase the items that they desire.


Tobacco Growers Poor Due To Cigarettes Tax

Wednesday, April 4th, 2012

discount kent cigaretteFor the past 17 years, farmer Bernadette Guya wakes up around 4 a.m. and works for the next 12 hours tending tobacco plants in a one-hectare leased plot in the northern Philippine province of La Union. She spends those hours watering and pruning them, and caring for each leaf by hand to remove pests. Guya earns roughly P50,000 ($1,169) from the sale of tobacco leaves, five months after planting them – a tiny income given the tedious work involved. But for this 39-year old widow, it’s the only way for her to earn a living and feed her four children.

Guya’s plight illustrates how the revival of tobacco growing, which went through a slump until recently, hardly benefits the farmers.

“Planting tobacco is hard work,” Guya said in Filipino. She wanted to plant other less labor-intensive but profitable crop.

Guya, however, doesn’t have the luxury of choice. In fact, of the 50,000 pesos that she earned during the previous cropping season that ended in May 2011, about half went to the trader who loaned her the money to buy fertilizer, pesticides and fuel for the water pump. She netted only P20,000 ($467.62) just barely enough to pay for her children’s schooling and food.

Guya sold all her harvest to the trader who loaned her the capital on the condition that she will plant tobacco. This arrangement leaves no choice but to sell at the price dictated by the trader. This cycle will be repeated in the current cropping season as Guya, bereft of savings, once again borrowed capital from the trader to allow her to plant tobacco last December.

With domestic cigarette consumption growing and big cigarette manufacturing companies picking the Philippines as the key raw material source, tobacco has recently emerged as one of the country’s fastest growing crops. Last year alone, production rose by 10.93 percent or almost twice the average 5.78 percent growth rate for all crops.

It has even brought in more foreign exchange for the country. Tobacco exports rose from 43.6 million kilograms in 2008 to 56.94 million kilograms in 2010, generating nearly $270 million in export receipts.

And yet farmers like Guya hardly benefit from these gains. The inequitable terms of trade facing Guya and other cash-strapped tobacco farmers like her underscores why tobacco growing is associated with rising poverty in spite of bright growth prospects.

From 2003 to 2006, Ilocos Sur, the biggest tobacco producer, also registered the highest increase in poverty incidence, from 22. 8 to 27.2 percent, according to the National Statistics Coordination Board. In this province alone, over 30,000 families are considered poor.

Long neglected by the government and the rest of society, tobacco farmers have suddenly become a centerpiece in the current debate over the proposed sin tax reforms in Congress.

Cigarette companies argue that raising sin taxes will reduce consumption, kill the industry and impoverish tobacco farmers. Tobacco control advocates insist that part of the revenues raised will be used to help tobacco farmers shift to other crops.

But for most tobacco farmers whose fate is supposed to hinge on the passage of the bill the issue is not whether sin taxes will increase or not. What they care about is whether those sin taxes will be used to finance their needs: irrigation, technical support, and marketing.

“The cigarette industry said the higher sin tax will hurt us. But we think if the sin taxes go up, the proceeds that are supposed to go to tobacco farmers will also go up. This will benefit us,” said Avelino Dacanay, chairman of Solidarity of Peasants against Exploitation (Stop-Exploitation).

STOP-Exploitation is comprised of farmers in Ilocos provinces – the northern Philippine region where most of the country’s tobacco are grown. The group seeks to uplift the welfare of small farmers in Northern Philippines by lobbying for land reform and fair prices for the farmers’ produce.

Cavite Representative Joseph Abaya recently filed House Bill (HB) No. 5727 which seeks to impose more uniform taxes on cigarettes and liquor, removing the lower tax rates enjoyed by established brands and low-priced products. President Benigno Aquino III supports the bill which is expected to bring additional $60 billion ($1.40 billion) in annual revenues, according to estimates by the department of finance.

The bill is in line with the Philippine government’s commitment to the World Health Organization’s Framework Convention on Tobacco Control (FCTC), a global treaty which aims to cut tobacco use. To this end, the government, led by the health department, has enacted several policies meant to curb smoking in one of the world ‘s biggest cigarette markets.

HB 5727 will raise taxes levied on cigarette and alcohol products, and in effect, increase retail prices of cigarettes in the Philippines, where which tobacco control advocates is one of the cheapest in the world. This deters people from smoking and endangering public health.

A 2006 study made by the University of the Philippines, World Health Organization and Health Department said economic costs of smoking, including expenses for health care and costs of productivity losses can hit as much as P300 billion ($7.01 billion) a year.

The Philippine Tobacco Institute (PTI), a lobby for the cigarette industry, is opposing the bill. In a press statement issued in January, PTI President Rodolfo Salanga questioned why the government is imposing higher taxes that will penalize not just the manufacturing firms but the 2.7 million farmers and their families who depend on the industry.

For Dacanay and other farmers, the more pressing issue is the government’s ability to provide financial, infrastructure and extension support that will free them from the clutches of tobacco traders, and allow them to freely choose the most profitable and suitable crop to grow.

“All the farmers want is for the government to help them shift to other crops,” he said. This includes funding irrigation facilities like simple water ponds or shallow tube wells as the soil in the region is dry, and capital and market support to wean away the farmers dependence on middlemen.

Farmer Perlita Sarro, also from La Union, said that if she has enough capital, she wants to become an entrepreneur, planting and selling vegetables that sell for higher prices than tobacco. She said that she only earned over P10,000 ($233.81) from the previous tobacco harvest in the one and a half hectare plot that she’s leasing from the owner. This is just enough to pay for the debt that she owed from the traders who loaned her the capital and to eke out a living. Like Guya, Sarro had to plant tobacco because that’s the only way to get a capital and be assured of a market for her produce.

A study done by Rene Rafael C. Espino and Danilo Evangelista, agriculture professors of the University of the Philippines in Los Banos, and Edgardo Ulysses Dorotheo of Southeast Asia Tobacco Control Alliance showed that tobacco farmers in Ilocos, given the right resources and opportunity, are willing to shift to other crops.

In the crop year of 2006 to 2007, the authors conducted a survey among 503 tobacco farmers and 484 non-tobacco farmers in the provinces of Ilocos Norte, Ilocos Sur, La Union, and Pangasinan.

The survey revealed that farmers preferred to plant non- tobacco crops like corn as tobacco is too labor intensive and requires them to work for 261 days (about eight months) before they can sell it. These crops also give them higher income. According to the study, farmers who planted bitter gourd net P158,640 ($3,709.14) per hectare, while tomato planting nets P116,204 ($2,716.95) per hectare. Planting Virginia tobacco only netted P51,642 ($1,207.44) per hectare.

The 51-year old Dacanay, who tilled tobacco for 20 years before shifting to corn farming, affirms that finding. He said that while a hectare of corn field earned him about P60,000 ($1,403), he only netted roughly P22,000 ($514.38) from planting Virginia tobacco.

“Tobacco planting doesn’t pay,” Dacanay said.

The only time that he saw tobacco paying off was in the crop year of 2009-20010. Dacanay said tobacco farmers were able to sell a kilo of tobacco for about P90 ($2.10) a kilo. This, he said, was relatively high compared to prices in previous crop years which range from P80 to P85 ($1.87 to $1.99). This encouraged farmers to plant tobacco in the next cropping season. In the 2010-2011 cropping season, prices dropped to P73 ($1.71) per ki

Smoking control in China, Cigarettes Tax

Wednesday, March 14th, 2012

discount ok cigaretteAttending the 11th National People’s Congress (NPC) in Beijing, Minister Miao Wei on Sunday explained to the media that tobacco tax consists of turnover, income and consumption taxes, and the government is looking into whether the measure will have an effect on China’s smokers of 350 million. Miao’s comments came two days after Minister of Health Chen Zhu announced that China is planning to raise taxes on mid- and low-end cigarettes, following the tax hike on high-end ones in 2009 that failed to meet targeted reductions of the country’s smoking population.

In other efforts, Miao said the health warnings on cigarette packs are being moved from the side to the front, and the government is planning other similar measures to campaign against smoking.

In 2006,China joined the World Health Organization’s (WHO) “Framework Convention on Tobacco Control” (FCTC). The following year, the State Council established a group led by the Ministry of Industry and Information Technology to promote smoking control in China.

California New Tax On Smokes

Friday, February 10th, 2012

tax free winston cigarettesThe study found that the new tax would have a significant effect on the state’s overall economy because Californians would smoke less and spend their money in other ways.

The initiative, the California Cancer Research Act (CCRA), is on the statewide June 5 ballot. If the measure is approved, state cigarette taxes would rise by $1 a pack, generating an estimated $855 million a year for anti-smoking education programs, medical research, and tobacco law enforcement.

“The primary impact to the California economy, besides the effect on health care, is that people will smoke less and send less money out of state,” said study author Stanton A. Glantz, PhD, a professor of medicine at UCSF and director of the Center for Tobacco Control Research and Education based at UCSF.

Currently, approximately 80 percent of money spent on tobacco products is exported to out-of-state tobacco manufacturers and farmers. No tobacco is grown in California and no cigarettes are manufactured here.

Under the legislation, 60 percent of funds generated by the new tax would go to cancer research and to address other tobacco-related diseases, 20 percent toward tobacco cessation and prevention programs, and 15 percent toward facilities and equipment for health services and research. The remainder would go to law enforcement to reduce cigarette smuggling and tobacco tax evasion, and to administer the tax.
The state’s independent Legislative Analysts’ Office has calculated that the new tax could save more than 100,000 people from smoking-related deaths.

On September 15, 2011, the UC Board of Regents endorsed the initiative. UC campuses are allowed to use their resources to objectively evaluate a ballot measure’s impact and to provide educational materials and information.

Glantz’ report of the analysis, which estimates both the direct and indirect effects of the initiative on employment and economic activity in California, uses standard estimates of jobs created and economic multipliers categorized by economic sector from the U.S. Department of Commerce.

If the new tax is approved, the study reports, it would cause some loss of retail jobs due to fewer retail sales — a loss that would be more than offset by a projected 12,000 new jobs in the California economy as a whole as well as in medical research, construction and other activities directly funded by the CCRA.
Altogether, the CCRA would generate a projected $1.9 billion in total economic activity.

A previous UCSF study co-authored by Glantz and James Lightwood, PhD, associate adjunct professor in the UCSF School of Pharmacy, estimated the ballot measure could save California up to $32 billion in health care costs over the next five years. Without the tax, the study concluded, the state’s tobacco control program would become less effective over time because inflation is eroding the five cents per pack currently allocated to tobacco control activities.