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The government is poised to establish a multi-agency team to oversee the clearance of tobacco products and designate special ports for novel nicotine and emerging tobacco products as part of a new agreement signed on Tuesday, May 20. This initiative aims to enhance control and monitoring within the sector.
The agreement, brokered between the State Department of Public Health and Professional Standards (SDPHPS) and the Kenya Revenue Authority (KRA), seeks to streamline the market access of tobacco products while boosting government revenue from the sector. Tobacco importers will have expedited clearance and stricter reviews on tax payments.
In a statement released by the Ministry of Health, the Susan Nukhumicha-led ministry highlighted a major initiative: the streamlined collection of solatium compensatory funds by KRA from importers and manufacturers of tobacco products, as mandated by the Tobacco Control Act 2007.
The solatium compensation, set at 2 per cent of the value of tobacco products, is designated to fund tobacco control research, cessation, and rehabilitation programmes.
“This effort aims to ensure that the funds are collected efficiently and utilised to support public health initiatives,” the statement read.
According to the Ministry of Health, the new measures will enhance efficiency at various ports of entry, expedite the clearance process and improve regulatory oversight. The partnership also includes the designation of special ports for novel nicotine and emerging tobacco products to bolster control and monitoring. This measure is expected to facilitate better management of such products entering the country.
The tobacco industry has historically resisted such taxes, influencing political processes to reduce tax rates. Consequently, the share of taxes on tobacco’s retail price has dropped from 75 per cent in 2008 to 23 per cent in 2020. This resistance has contributed to persistently high tobacco consumption and rising lung cancer deaths.
Currently, Kenya collects Ksh12 billion in excise tax from the tobacco industry. However, the government spends Ksh15 billion annually to mitigate tobacco-related health conditions. The industry withholds Ksh19 billion annually by evading the fair tax rates advocated by the World Health Organisation. This economic imbalance is particularly concerning given that new cancer cases are projected to rise by over 120 per cent in the next two decades, partly driven by tobacco consumption.
The cigarette product market in Kenya is estimated to generate $815 million (about Ksh107.17 billion) in revenue in 2023, with an expected annual growth of 2 per cent until 2027.
To combat the distribution and sale of illegal tobacco products, the collaboration will also enhance surveillance, compliance, and enforcement efforts. These measures aim to protect public health by curbing the illicit tobacco market.Another critical aspect of this partnership is the enhancement of laboratory testing capabilities for novel nicotine and other emerging tobacco products. Improved testing will ensure these products meet safety standards and are appropriately regulated.