Sunday, July 12, 2009

Response to 3/7/09 Mail & Guardian article `Draughts of Change`

source: Republic of Botswana (11/7/09) TAUTONA TIMES no 18 of 2009
The Weekly Electronic Press Circular of the Office of the President
Democracy, Development, Dignity and Discipline

D2) 8/7/09: Response to 3/7/09 Mail & Guardian article “Draughts of Change”

The 3 July 2009 edition of your newspaper carries an article (Draughts of change”), critiquing what it describes as the Government of Botswana’s “implementation of its draconian 30% alcohol levy”.

The same article makes additional dubious claims, e.g. the alcohol tax “is driving locals to drink” and that Windhoek Lager “is the cheapest mainstream beer in the country because it is brewed over the border” (conveniently ignoring the fact that the levy is applied to all alcoholic beverages sold in the country).

The simple fact of the matter is that the use of alcohol specific taxes to curb consumption and mitigate harm has is common international practice.

In this respect Botswana lagged behind other nations, including South Africa, in belatedly introducing its own alcohol tax.

Outside of the liquor industry, alcohol specific taxes, enjoy widespread support among experts in the field of substance abuse policy, as well as public safety and health stakeholders, as an effective instrument for reducing alcohol related harm, such as motor vehicle mortality, violent crime, family violence and child abuse.

Perhaps not surprisingly, the effect of price changes on alcohol consumption has been found by some to be greater in low to middle income countries than high income countries, while young and underage consumers are known to be particularly sensitive to price.

The World Health Organisation’s (WHO) 2004 Global Status Report: Alcohol Policy, for example, concluded that:

“Extensive studies conducted in many developed and some developing countries demonstrate that increases in taxes and prices are related to reductions in alcohol consumption and harm… Ideally taxes on alcoholic beverages should be placed high on the list of possible policy measures as they are effective, cost-effective, easy to implement, and can generate government revenue and reduce both consumption and harm.”

According to the same report of the 117 countries that participated in a taxation survey 95% imposed either a general sales tax or VAT on alcohol, while the majority went further in imposing additional alcohol specific taxes, ranging from 3% to 200% of retail price.

Among a representative sub-sample of countries that provided data on alcohol specific excise taxes as a percentage of their domestic retail price, it was thus found that the average total tax burden on beer, wine and spirits, was respectively: 38%, 37% and 56%.

Alcohol specific taxes, of course, have the additional advantage of providing Governments with revenue that can be used to finance the costs borne by public health services, law enforcement agencies and justice systems as a result of alcohol related maladies, as well as help finance preventative interventions such as public awareness campaigns.

In the light of such evidence that the 58th Session of the WHO Regional Committee for Africa, held in Yaoundé in September 2008, recommended increasing taxes to influence prices and reduce alcohol affordability as one of a number of long-term actions to fight alcohol consumption on the continent.

In this regional and global context, it is hard to see your correspondent’s justification for describing Botswana’s 30% levy, which was introduced as part of a holistic campaign to combat substance abuse in the country, as being especially draconian.

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