Health Authorities Push Through Taxation Guidelines Behind Closed Doors at Moscow WHO Summit

PR58272

GENEVA, Oct. 16, 2014 /PRN=KYODO JBN/ --

"An Alarming Attempt to Erode Countries' Sovereignty on Taxation Policies"

Yesterday at the WHO FCTC's Conference of the Parties (COP6) in Moscow,

guidelines on price and tax measures (Article 6) were hurriedly adopted behind

closed doors, further demonstrating the FCTC's habit of infringing on issues of

national sovereignty.

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"Public health authorities are not fiscal experts", said Michiel Reerink,

Global Regulatory Strategy Vice President at JTI (Japan Tobacco International).

"Yet, one-size-fits-all decisions were rushed in the absence of a vast majority

of governments' taxation experts, who should have the last say on their

individual fiscal policies".

The COP has once again shown a complete lack of respect for several Parties by

blatantly ignoring their wish to express their reservations on the guidelines,

particularly regarding the minimum benchmark tax of 70% and the allocation of

tax revenues to finance tobacco control programs[1]. Two years ago, at COP5 in

Seoul, Korea, Parties adamantly opposed the same recommendations. Despite this,

the draft guidelines remained largely unchanged and were nevertheless adopted

at record speed.

"While the guidelines are not binding for governments, Ministries of Finance

will be under pressure to adopt them in their national law.  Yesterday's

decision not only represents an alarming attempt to erode countries'

sovereignty on taxation policies, but also violates COP6's own requirement to

make 'every effort' to reach agreement by consensus", added Mr. Reerink.

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1. The FCTC's October 15, 2014 Journal stated: "Several parties wanted to

record their reservations concerning the footnote related to section 3.2

stressing their sovereign right to develop their taxation policies. The draft

decision contained in FCTC/COP/6/A/Conf. Paper No. 5 was approved without

amendment. The agenda item was then closed."

When making decisions on tobacco tax policies, countries take into account a

number of considerations: income growth developments, the impact of price

increases on the affordability of tobacco products, the existence of illegal

trade (and tax authorities' ability to enforce compliance), inflation and

regional sensitivities such as cross-border trade.

"Tax experts around the world recognize that ignoring these considerations is

counterproductive and could lead to serious consequences, including a major

increase in illegal trade, depriving governments of important tax revenues and

undermining other government policy objectives - including public health," Mr.

Reerink concluded.

During the October 15 vote on FCTC's Article 6, the public and the media were

once again locked-out from proceedings. This move, combined with the last

minute decision to cancel press briefings, further confirms the WHO's lack of

transparency, accountability and integrity.

JTI, a member of the Japan Tobacco Group of Companies, is a leading

international tobacco manufacturer. It markets world-renowned brands such as

Camel, Winston and Mevius (Mild Seven). Other global brands include Benson &

Hedges, Silk Cut, Sobranie, Glamour and LD. With headquarters in Geneva,

Switzerland, and about 27,000 employees worldwide, JTI has operations in more

than 120 countries. Its core revenue in the fiscal year ended December 31,

2013, was USD 12.3 billion. For more information, visit http://www.jti.com.

Source: JTI (Japan Tobacco International)