Kenya Takes Aim at Tobacco with Steep Tax Hikes

Kenya’s Ministry of Health has sounded the alarm over the increasing use of new-generation tobacco and nicotine products

Speaking at a worship service in Embu on January 12, 2024, Principal Secretary Mary Muthoni voiced the ministry's concern over the long-term health risks associated with these products.

"These new-generation tobacco and nicotine products are becoming a significant health risk. We must act now to protect future generations," asserted the PS.

Her words echoed the growing concern over the rising popularity of non-combustible tobacco and nicotine products among the youth. These products are easily accessible at online shopping sites and walk-in retail outlets, making the youth an easy target to their slick social media advertising and influencer-led campaigns that portray their consumption as fashionable.

The Kenyan government has been grappling with the issue of tobacco control, with the Ministry of Health warning against the use of electronic cigarettes, nicotine pouches, vapes, and related products due to their potential to cause health complications.

Higher tobacco taxes typically lead to increased prices for cigarettes and other tobacco products. This price hike can encourage smokers to quit or reduce their consumption. Evidence suggests that a 10% increase in cigarette prices can result in a 4% decrease in overall demand, particularly among vulnerable groups such as youth and low-income individuals

According to tax expert John Thomi, "Tobacco tax is a central factor in pricing and therefore can be used to reduce tobacco affordability through price increase."

For the last 18 years, this approach has been championed by health advocates, who argue that higher taxes can deter consumers from purchasing tobacco products. The Kenya Tobacco Control Alliance (KETCA) has been at the forefront of efforts to reduce tobacco consumption, with chairman Joel Gitali noting that "the increase in taxation is expected to discourage consumption and promote healthier choices among the population."

In a bid to curb the devastating impact of tobacco use, Kenya has announced a significant increase in excise duties on nicotine products. This move is aimed at reducing consumption and mitigating the harmful effects of tobacco on public health.

From December 27, 2024, the tax on filtered cigarettes will rise by a modest 0.81% to KES 4,100 per mille, while nicotine substitutes such as vapes and e-cigarettes will see a staggering 25% hike to KES 2,000 per kilogram. The tax on liquid nicotine for electronic cigarettes will experience a nearly 43% jump to KES 100 per millilitre.

These tax hikes are a crucial step in the country's ongoing battle against tobacco use, which claims approximately 12,000 lives each year and is linked to chronic diseases such as respiratory illnesses and cancers. A study revealed that between 2012 and 2021, tobacco-related diseases accounted for about 16.5% of total deaths among adults aged 35 and older, resulting in over 60,000 deaths.

Research suggests that a mere 10% increase in cigarette prices can lead to an approximate 8% decrease in demand.

The excise duty hikes, welcomed by health advocates like the National Taxpayers Association (NTA), KETCA and Den of Hope, aims to reduce consumption and mitigate the harmful effects of tobacco on public health. They are expected to have a significant impact on consumption, particularly among vulnerable groups such as youth and low-income individuals.

As Kenya fights to reduce the extensive health and economic burdens posed by tobacco use, the new taxes are a welcome step towards a healthier future. The question now is whether these measures will be enough to curb the tobacco epidemic and save thousands of lives.

However, critics argue that such measures may drive consumers towards cheaper, illicit alternatives, undermining efforts to control tobacco use.

Gitali acknowledges this concern, but argues that "fears of increased illicit trade are often exaggerated by the tobacco industry as a means of stalling tax reforms."

He further emphasizes that "the argument that higher taxes will lead to an increase in illicit trade is a tactic used by the tobacco industry to undermine public health initiatives. Evidence shows that well-implemented tax policies can reduce smoking rates without significantly increasing illegal trade."

NTA also highlights that "the economic argument against tobacco taxation is also undermined by the overwhelming health costs associated with tobacco use." Despite the potential risks, the NTA remains confident that the overall health benefits of higher taxes outweigh the potential negatives.

Kenya's quest to control tobacco use demands a balanced strategy, combining tax hikes with public education campaigns and robust enforcement. By striking a balance between these measures, the government can effectively reduce tobacco consumption, promote healthier choices, and alleviate the economic burden of tobacco-related diseases on society, ultimately leading to improved health outcomes.