EXPERIENCES OF INCREASES TO THE TAXES ON TOBACCO IN SURINAME Panama City, July 11 Marita Wijnerman, LLM Head Fiscal Affair- Indirect Taxes Ministry of Finance Directorate of Taxes

WHO Framework Convention on Tobacco Control Suriname Signed the framework on 25 June 2004; Ratification date 16 December 2008 Measures to be taken; Suriname doesn’t have the tobacco law in place yet. some action was taken to fulfill the convention

Taxation on tobacco in Suriname Import dutiesConsumption taxOther duties Cigars50%10%2% Cigarettes50%10%2% Tobacco50%10%2% Other Tobacco50%10%2% Source: Custom legislation Consumption law

Taxation on tobacco Excise 2006After Sept 2011 Cigars44 US dollar per 500 pieces66 US dollar per 500 pieces Cigarettes44 US dollar per 1000 pieces66 US dollar per 1000 pieces Tobacco44 US dollar per kg66 US dollar per kg Other tobacco44 US dollar per kg66 US dollar per kg Source: Excise law on Tobacco

Illicit trade Suriname biggest concern was : 1.that a certain part of the tobacco products disappeared in the black market. 2.Access cheap tobacco for the young population; 3. Under-valuation, appears to be common practice; 4.the smuggling of cigarettes.

Article 6 FCTC At that time the Government of Suriname needed to meet the requirements of article 6 of FCTC. Since taxes are not only a budget instrument, but also a tool to discourage a behavior.

What measures have been taken The first action in Increase the excise taxes with 100% in 2006; 2. Change the tax base from ad valorem to specific tax; 3. Implement Excise stamps (2008) Important : In the Tax law the government stated that the purpose of the tax increase was to fulfill art. 6 of the FCTC.

Other measures 4. Set up an Special Excise Stamp Control Unit (custom officers and officers of Min. of Trade, the Department of Economic Crime); This Unit is working closely with the Fraud department of the Police.

Concern Tobacco Industry Suriname does not manufacture tobacco products. But there are some big importers. When the government increase the tax in 2006 they have the following concern. 1.Job losses; 2.Increases of illicit trade;

Excise stamps

Cigarettes from illicit trade

Tobacco consumption

Increasing taxes in 2011 second action New government in 2010 announced fiscal measures; Increase Excise taxes with 50 % in 2011.

Price before excis e Price without excise ↑ 50% excise New price MORELLO 20'S FULL FLAVOR MORELLO 10'S FULL FLAVOR DUNHILL FULL FLAVOR DUNHILL 10'S FULL FLAVOR DUNHILL MENTHOL DUNHILL LIGHTS DUNHILL FINE CUT BLACK PALL MALL FULL FLAVOR PALL MALL LIGHTS PALL MALL MENTHOL PALL MALL 10'S FULL FLAVOR PALL MALL 10'S LIGHTS PALL MALL 10'S MENTHOL VOGUE BLEUE VOGUE MENTHE

Prices of cigarette now Brands Price of a package (20 pieces) (US$) Pall Mall2,30 2,62 Dunhil3,02 Marlboro3,69 Capital 2,11 Tradition2

ExpectedRevenue 2011

Revenue Source: Custom Department of Suriname and the Collector

Revenue Source: Custom department of Suriname and the Collector