1. Experience and Prospects in the Caribbean Community (CARICOM)
Tobacco Taxation:
Win-Win for Public Health and Domestic Resources
Mobilization Conference
World Bank
Experience and Prospects in the Caribbean Community (CARICOM)
The Taxation of Tobacco
Prof. Karl Theodore
Washington D.C. April 18th-19th, 2017

2. Tobacco Control in the Context of Non-Communicable Diseases (NCDs) (1)
Tobacco control plays a crucial role in addressing the important issue of NCDs.
According to WHO (2016) estimates, tobacco-related deaths in the Region stands at 14% among adults aged 30 years.
 Tobacco is responsible for:
16% of deaths from cardiovascular diseases;
25% of deaths from cancer and
52% of deaths from chronic respiratory diseases.

3. The Tax Solution(1)
The WHO, through the FCTC, has championed the effort to encourage higher taxation on the product.
The taxation of tobacco and tobacco products has been shown to be effective in different parts of the world.
A recent UWI study estimated the tobacco taxation required for targeted consumption changes.

4. The Tax Solution(2) - HEU study
%∆ Consumption
Grenada
Trinidad and Tobago
% Increase in Average Excise Tax Per Packs
%∆ TR
%∆ ER
-5%
17%
(EC$3.20-EC$3.80) 9%
11%
33%
(TT3.81-TT5.05)
15%
26%
-10%
35%
(EC$3.20-EC$4.40)
16%
21%
64%
(TT$3.81-TT$6.25)
27%
48%

5. Tobacco Taxation in CARICOM (1)
By 2011 most members of the CARICOM sub-regional block had either fully ratified or agreed to the FCTC.
The FCTC, among other things, requires countries to use taxation measures to deter tobacco consumption.
The Port of Spain declaration also called for taxation of tobacco among CARICOM countries.

6. Tobacco Taxation in CARICOM (2)

7. Action on Tobacco Taxation (2013 - Mar 2017)(1)
Country
Action on Tobacco Taxation ( March 2017)
Effective Date
Barbados
Phased in 25 % increase of excise tax on tobacco products.
Bahamas
Switched from an ad valorem excise of 220% of value to a specific excise of $0.15 per stick.
Added a specific excise of $0.50 per stick of cigar.
Introduced an import duty of 45% of value on electronic cigarettes.
Introduced an excise stamp fee of $0.25 per self adhesive and $0.20 per dry stamp.
July 2013
July 2014
Belize
Free Zone cigarettes excise increased to 20% of value.
2017
Dominica
10% increase on excise tax for cigars and cigarettes.
September 2015

8. Action on Tobacco Taxation (2013 - Mar 2017)(2)
Country
Action on Tobacco Taxation ( March 2017)
Effective Date
Guyana
Increased licence fees on tobacco manufacturing by between 66.67% and % and licence to sell tobacco increased by 233%.
2016
Jamaica
Increase of Special Consumption Tax (SCT) on cigarettes, cigars, cigarillos, cheroots (including substitutes for these products) from J$10.50 to J$12 per stick.
Increase of SCT on tobacco products from J$12 to J$14 per stick.
increase of SCT on cigarettes etc. from J$14 to J$17 per stick.
March 2015
May 2016
March 2017
St. Vincent
Increased excise duty on cigarettes from $0.55 to $1.55 per 100 sticks.
February 2015
Trinidad and Tobago
Excise duty increased by 15% on local and imported tobacco products.
October 2016

9. Youth Prevalence of Tobacco Use
Country
Year
Prevalence (%)
Bahamas
2009
2013
16.4
12.6
Barbados
28.6
14.5
Belize
2014
18.3
12.3
St. Vincent and the Grenadines
2011
19.1
19.4
St. Lucia
17.9
20.7
Trinidad and Tobago
2010
19.9
18.4

10. The Jamaica Experience
Nine tax increases in nineteen years ( ).
In March 2017 the authorities increased the Special Consumption Tax (SCT) rate by 21.4%.
The latest available data (2015) show a tax share for cigarettes of %.

11. How Has Consumption Been Affected?

12. How Have Revenues Been Affected?

13. Smuggling
Widely believed that smuggling is prevalent in the CAROCIM region.
It is estimated that billion sticks of cigarettes are illegally imported and distributed in Jamaica.
In 2016, the Jamaica Customs Agency (JCA) announced the intention to implement a tax stamp system.

14. Conclusion
Rates of taxation on tobacco in CARICOM show strong variation.
Different countries in the region have been continuously experimenting with taxation of tobacco.
The potential for smuggling is present, strengthening the case for harmonization.
With sufficient technical support and with the demonstrated tendency to use taxation the prospects for beneficial harmonization of tobacco taxation look good.