Somaliland’s Ministry of Finance is losing much needed tax revenue on Cigarettes

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I have recently learned the price of a pack of cigarettes to be just 10,000 (ten thousand)SM shilling, which is equivalent to 1 (one) US Dollar. This indicates to me  that the government does not tax cigarettes sufficiently and that is why the price is unbelievably cheap. This came to me as a shock in two ways:

  1. Unrealistically cheap cigarette is a major health hazard to people. The reason is that at this price cigarettes are very affordable, which indirectly encourages cigarette smokers to consume more. On the other hand by levying high taxes on cigarettes which by extension raises the cost of cigarette, young people and lower-income people are less likely to smoke since they cannot afford to buy cigarettes. This strategy would lower the number of people who smoke, and thus reduce the risk of smoking-related diseases.
  2. The equally important problem I have with this price is that the ministry of finance is losing much needed revenue in not taxing cigarettes appropriately. It is a fact that large tax on cigarettes will raise cigarette prices, making them less affordable, and driving down smoking initiation and consumption.

To get some understanding of the cost of cigarettes around the world I have listed the price of a pack of cigarette for 10 countries from five continents.

Below is the price of 20-cigarette pack of the most-sold brand in U.S. dollars; adjusted for purchasing power of national currencies (source: www.tobaccoatlas.org )

Ranking Country Price is US Dollars
1 Venezuela 22.12
2 Australia 14.86
3 United Kingdom 11.98
4 Malaysia 11.82
5 Eritrea 11.14
6 Turkey 10.26
7 France 8.60
8 Canada 8.54
9 Tanzania 4.40
10 Kenya 2.82

 

I hope the Ministry of finance will use this information to adjust the rate of tax on cigarettes.

Thanks you,

Yusuf Muhumed Jama

Hargeisa, Email: am83301@yahoo.ca

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