Cost to health far more than R12bn in taxes tobacco generates, says health expert

Dr Yussuf Saloojee says tobacco companies are adept at using jobs and taxes to fight control efforts.

Dr Yussuf Saloojee, director of the National Council Against Smoking, has said that South Africa’s anti-tobacco lobby needs to create more effective messages to counter the tobacco industry’s focus on the economic role it plays and the taxes it pays.

Saloojee was speaking at the launch of the 2021 Tobacco Industry Interference Index for South Africa.

“The industry has managed to win ears. Instead of being seen as a liability, which it really is, the industry is seen as an asset, in the sense that it provides jobs and taxation,” he said.

While the harm caused by cigarettes and tobacco was far greater that the R12 billion in taxes the industry generates, it was difficult to explain this in a snappy slogan, he said.

He added that the country’s anti-smoking lobby had failed to effectively communicate that tobacco control means social, economic and health benefits. While SARS would lose billion of rands in taxes if fewer cigarettes were sold, the benefits of cuts in tobacco sales would only be seen over many years.

“It is a difference between short-termism and long-term perspectives,” he noted. “If you take a long-term perspective there is absolutely no reason on earth why tobaccos should not be controlled.”

Tobacco’s economic cost

According to a presentation by British American Tobacco SA to Parliament, tobacco duties will contribute R11.5 billion in the year to March 2020. This covers some periods during which the sale of tobacco was banned. Treasury had hoped that excise duties would contribute around R13 billion. The average income from tobacco excise duties for the 2019/20 financial year was around R40 million per day, according to Africa Check, which comes to closer to R15 billion for the year.

According to a 2020 Oxford University Study, while the total economic cost of smoking was around R42 billion, the actual healthcare cost came in at R14.4 billion. The same study found that overall, for every rand that comes in in the form of cigarette tax, society loses R3.43, meaning tobacco use is a net economic drain.

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