Aug 05, 2017 News
By Kiana Wilburg
The nation’s health is much more valuable than the billions of dollars in taxes that the government
collects annually from the tobacco sector. As such, the Government says it is willing to deal with the likely financial implications if it means safeguarding the health of the nation.
This is according to Minister of State, Joseph Harmon.
At his post cabinet press conference yesterday, Kaieteur News informed the Cabinet Secretary that the Demerara Tobacco Company Limited (DEMTOCO) contends that should the Tobacco Control Bill be assented to as is, it could put the billions in revenue they collect from the sector in jeopardy.
With this in mind, Harmon was asked to state what plans government has in place to offset the moneys likely to be lost in this regard.
Harmon said, “This Bill was fully debated in the House and once the paperwork is completed it will be submitted to the President for his assent…I think it is a little bit too late for what they want to get done (which is to send the Bill to a select committee).”
The Minister of State added, “We would not sacrifice the health of this nation, even if it meant $4B or $5B. The health of this nation is invaluable. In the House, we had a strong debate and a point that was supported by both sides is that the health of the nation cannot be sacrificed on the altar of expediency.”
As for the plans to deal with the impact the Bill will have on tobacco revenue, Harmon said that it will now be up to the Ministry of Finance to see how this is going to be done. He said that it will involve a process of consultations with that Ministry as it prepares the budget.
“But we have passed the stage of it going to a select committee,” Harmon stressed.
In a recent media briefing, DEMTOCO officials said that a Special Select Committee would give them and other stakeholders, a chance to explain their concerns regarding the Bill, including the domino effect it would have on the company, Guyanese retailers and even the national purse.
Speaking specifically to the issue were DEMTOCO’s Managing Director, Mrs Maurlain Kirton and DEMTOCO Director, Raoul Glynn.
Kirton explained that the Bill, in its current form, would affect revenue for the government.
The DEMTOCO Director said, “Our position is that while we say we need to be regulated, regulate it in such a way that you will still be able to extract the revenue. Sometimes we are chastised for saying we are one of the top five companies. But last year we paid $4B in total taxes. That is a fact, not a feeling.”
Kirton continued, “So if for whatever reason the Bill goes through as is…somewhere you start to lose that $4B you receive as a government. And we all live here. We understand that revenue is really what keeps your economy buoyant. And so what will happen is that consumption will move from the legal company to the underground (activities)…”
Furthermore, the officials were asked to provide an estimate of what could be the possible reduction of taxes paid to the Government based on trends in other countries.
Glynn said that in Suriname, it was 70 percent of revenue that was lost. If you look at Guyana’s situation and do the math of 70 percent of $4B, you would see what would happen, added the Director.
He added, “In Panama, 75 percent of revenue was lost, but consumption remained the same. The consumption was taking place in such a manner that it was evading the tax net altogether. The government gets no part of that revenue. And what it forces the government to do is to look for taxes in other areas so as to try to make up for the revenue that it has lost.”
In a matter of nine months, Guyana will be preparing to implement one of the most regimented health laws it has ever had in recent times—the Tobacco Control Bill.
The Bill proposes a number of strict penalties and fines for law breakers; it will seek to encourage a new behavioural pattern amongst Guyanese.
The Bill will allow for officers authorized by the Ministry of Public Health to be vested with the power to carry out any inspection, investigation or enforcement for the purposes of the Bill.
Any person who denies, obstructs or hinders an authorized officer in carrying out his or her duties; or knowingly makes any false or misleading statements, verbally or in writing, or refuses to provide requested information to an authorized officer, commits an offence and is liable on summary conviction to a fine of $400,000 and imprisonment for six months.
Additionally, the Bill states that no person shall smoke in the following outdoor places— anywhere on the premises of and within five metres from the outside boundaries of any health care, educational or child care facility; any waiting area or queue in a public place, including but not limited to any public transport stop, bus stand or bus park; any park, playground or amusement park; any stadium, arena, or other kind of sport or performance space; any gazetted site of historic or national significance; any space for the commercial service of food or drink; or any other outdoor place prescribed by regulations.
The Bill also lists examples of indoor public places where smoking is now prohibited. These include Retail establishments, including stalls, stores, shops, and shopping malls; hotels and other places of lodging; Restaurants, bars, pubs, cafes, and other eating or drinking establishments, Gaming machine venues and casinos; Entertainment facilities including clubs, cinemas, concert halls, theatres, game arcades, pool and bingo halls.
Smoking, according to the Act, is also prohibited at any publicly-owned facility rented out for events and any other indoor premises accessible to the public and any indoor workplace.
Any person who smokes in any place where smoking is prohibited commits an offence and is liable on summary conviction to a fine of $10,000 for the first offence, and $20,000 for any second or subsequent offence.
Additionally, the Bill makes it clear that all cigarettes shall be sold in an intact package containing not less than twenty sticks or individual units per package. This brings an end to the sale of one or two cigarettes at regular outlets.
The Bill also states that no person shall go into any public place carrying any tobacco product, electronic delivery system, or component, in a tray, container or otherwise for the purpose of making sales or commercially displaying the product.
Furthermore, the Bill prohibits tobacco advertising, promotion, and sponsorship. In this regard, local night clubs would have to change for example, the manner in which they promote their hookah /smoking themed parties.
Should a corporation or other entity contravene any provision of the Act, it shall be deemed to have committed the offence and shall be held liable for all costs and fines associated with any enforcement or corrective action and for any term of imprisonment ordered.
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