Tobacco taxation: CRES launches SimTax to inform public decisions

The Center for Applied Economics Research (CRES) launched, Monday in Dakar, SimTax, a simulation tool for the taxation of tobacco products intended to evaluate the effects of different taxation options on consumption, public health and state revenue.

Developed by CRES, SimTax makes it possible to model the consequences of different tax scenarios on tobacco consumption, smoking prevalence and public revenue, with the aim of contributing to the protection of population health.

The tool was presented during a workshop organized by the Civil Forum, in partnership with Tax Justice Network Africa (TJNA) and CRES, as part of an advocacy project for better tobacco taxation in Africa.

The meeting was also an opportunity to share the results of an advocacy document developed by CRES and to mobilize stakeholders around the introduction of a specific tax on tobacco products in Senegal.

The director of CRES, Professor Abdoulaye Diagne, underlined the importance of reviewing the tax system applied to tobacco in order to strengthen its effectiveness and better protect the health of the population.

He recalled that Senegal increased the ad valorem tax rate on cigarettes from 30% to 100%, thus exceeding the minimum of 50% set by the regional directive of the Economic Community of West African States (ECOWAS).

However, the country is still far from the objective of a tax representing 75% of the retail price of cigarettes. The specific component provided for by the Community directive has, moreover, not yet been effectively implemented.

The deputy coordinator of the National Tobacco Control Program (PNLT), Doctor Khady Gaye, recalled that taxation constitutes an essential public health instrument, by helping to reduce the financial accessibility of tobacco products.

She indicated that SimTax will provide objective data to assess the potential effects of different tax options on consumption, smoking prevalence and public revenue.

Stating that the tool does not replace public decision-making, she underlined its role in supporting decision-making and facilitating dialogue between the health, economy, finance and research sectors.

The representative of Tax Justice Network Africa, for her part, noted that the structure of taxation plays a determining role in the evolution of prices, consumption and tax revenue. In the absence of a specific tax, consumers may switch to cheaper brands, thereby mitigating the effects of tax increases, she explained.

The coordinator of the Civil Forum, Matar Sall, welcomed the progress made in the context of advocacy for more effective tobacco taxation, while emphasizing the need for collaboration between public authorities, researchers and civil society.

He called for better coordination of stakeholders to promote the application of community directives from ECOWAS and the West African Economic and Monetary Union (UEMOA), and strengthen national tobacco control policies.