JAMAICA
Carreras Limited has noted with grave concern the release from the Jamaican Ministry of Health advising that portfolio minister Dr. Christopher Tufton and his team are actively evaluating the World Health Organization’s call for heavy taxation on the tobacco industry.
The company said, “Even more alarming, is the release’s reference to a report from WHO noting that if countries raised cigarette taxes by about 80 cents per pack, annual tax revenues could increase by 47%, amounting to an additional US$140 billion per year.”
Carreras also argued that the perspective that the demand for tobacco products will be stemmed by higher prices from heavy taxation is an erroneous one.
“The truth is when prices are too high in comparison with the available income and what people are willing to pay, the opportunity and incentive for the illicit trade in cigarettes increases. This scenario is the current reality in Jamaica as years of successive and excessive levels of increase in tobacco excise, has led to an exponential increase in the presence of illegal cigarettes and a dramatic decline in legal cigarette volumes.”
According to Carreras, the legal market in Jamaica has declined by 100% in less than 10 years, with the lost volume going directly to illicit trade. The company estimates that the government has been suffering loss of revenue to the amount of almost $2 billion Jamaican on an annual basis.