Sin taxes hike looms

HARARE - Tobacco and alcohol consumers must brace for a price hike as government works towards ensuring that sin taxes fund a disability fund, Labour minister Paurina Mpariwa said.

Speaking on the sidelines of the 22nd Session of the ministerial Governing Board (GB) of the African Rehabilitation Institute (Ari), Mpariwa said the price policy is going to be used to reduce the damage caused by tobacco and alcohol.

“Sin taxes are taxes imposed on activities harmful to society.  Alcohol and tobacco are vices thus prime targets of heavy taxation,” Mpariwa said.

“We are going to adopt a levy system on tobacco and alcohol that will be aimed at controlling the intake of these products, and at the same time contributing towards the welfare of the disabled,” said Mpariwa.

“We know that alcohol and tobacco multinational companies are going to protest, but we are ready for them as this has been implemented elsewhere,” the minister said.

“This tax price policy is coming. If other countries have done it for the greater good, why can’t we,” the outspoken minister said.

African Rehabilitation Institute East African Regional Office African Union (AU) regional director, Joseph Learamo said a legal framework is vital for the development.

“In African countries, abuse of funds is inevitable and to make sure the proceeds go to the intended beneficiaries, governments must see to it that a legal framework is in place to keep a system of checks and balances,” Learamo said.

There was consensus among various members of the AU at the session that raising tobacco and alcohol taxes is one of the most effective components of a tobacco control policy.

“Even when prevalence rates have decreased significantly, price increases remain a strong economic disincentive,” Learamo said.

Currently, Botswana has a 30 percent levy on local and imported alcohol to reduce local consumption.

South Africa also has a strong tobacco control strategy based on increasing excise taxes on tobacco.

Zimbabwe’s capital, Harare, ranks high for its drinking habits across the board.

According to the Centre for Disease Control and Prevention (CDC), Harare consumes more alcohol than any other city or region in the country.

According to the minister, Harare will also be the biggest contributor towards the trust fund set to benefit neglected disabled people.

 “At the moment, what I am at liberty to say is as Cabinet we are going to look into a levy on tobacco and alcoholic products based on a percentage mutually agreed upon by the major stakeholders.

“This will ensure that the projected income will match estimated expenditure for comprehensive empowerment programmes which will ensure effective implementation of respective disability-related conventions, laws, policies and strategic plans,” said Mpariwa.

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