The effects of tobacco usage in humans have some of the worst results that can be imagined of any legal drug. In most instances, frightening complications on the human body have been associated the usage of tobacco and its products. Tobacco, rated by the World Health Organization (WHO), as one of the chief causes of some dreadful human diseases like cancer of the throat and that its use influences increase in the prevalence of tuberculosis the peoples of the world, there have been calls from major health stake holders and other groups to the government in order to curb this trend. The government of the United Kingdom (UK) has had to contend with these calls and has taken up numerous steps to come up with policies that regulate the usage and trading in tobacco and its products. Among the steps it has taken, taxation has had the most debatable effects but generally, it has been cited by many as the best way to control the usage of this legal but very dangerous and highly addictive substance.
In recent years, the taxation of tobacco in the United Kingdom has come to be accepted by most of the users of tobacco. This taxation was introduced by the British government in order to make tobacco products more expensive. The British government’s objective of imposing more tax on tobacco and its products is to ensure that its affordability is reduced as a measure of reducing smoking prevalence while at the same time increasing the revenue collected by the government (Action on Smoking Health (ASH), (2010). As still can be deduced from ASH (2010), in the 2011 budget, the British government sustained the tobacco taxation policy and restructured its taxation in order to curb the trading in Hand-rolled tobacco. Taxation is also cited as one of the ways that the UK governments applies in order to curb illegal smuggling of the substance into its territories from other countries that seem to be less strict in their plight to control the usage and sale of tobacco and its products.
The tobacco manufacturer’s association (TMA), a body that oversees all the issues related to the manufacturing, taxation and usage of tobacco among the population of the citizens of the UK, has reported the results from numerous surveys related to the issues of tobacco and its usage in the UK. In one of the studies that TMA was involved in, the Centre for Economic and Business research (CEBR) (2009) in a research trying to establish the effects of the increased taxation of tobacco in the UK, reported that though high tobacco products prices and tobacco display bans increased the activities in the illicit tobacco market, these higher prices showed significant improvements in the wider economic impact of the general revenue collection of the UK government. Assuming that these findings are reliable, then with effective policies that regulate the legal sale of tobacco thus shutting the sale of tobacco illegally, there is hope of containing any form of illegal trading in substandard tobacco products that are very dangerous for human consumption.
Results from the TMA show that excise duty and Value Added Tax (VAT), generated from the taxation of tobacco products remain being one of the major sources of government revenue generating up to a tune of 12.1 billion pounds annually. This though is dimmed to even increase in the coming years because, it has been observed that successful governments in the UK maintain the ‘escalator’ of the taxation policy by increasing the taxes year-on-year. Data from the UK treasury indicate that on a pack of twenty cigarettes the total tax burden of £5.83 accounts for 78% of the recommended retail price (RRP) of £7.47 (TMA, 2010). Though there has been an outcry from sellers and consumers of the tobacco products in the UK regarding this trend of imposing very high taxes on products of tobacco, the current government has not shown any realistic signs of any intention to lessen the burden that is imposed to the consumer of tobacco products. However, as these consumers show signs of distress, the British Health Care Insurance system (BHCI), seems to be jubilating on this.
The BHCI system, just like any other insurance system in most countries is charged with the responsibility of paying for the medical bills of its registered members. According to the WHO (2004), health insurance companies tend to act as avenues for ‘prepay’ of medical bills of its members and in this case, where taxation on tobacco, having generated immense debate, all users of tobacco who are members of health insurance companies have acquired the protection against ill health as per to what is required of the law by the BHCI. Since the topic of tobacco and all the issues related to its effects and taxation has of late become a major point of concern, analyzing how the BHCI system liaises with the government in the undertaking of its functions and attaining its objective has become one of the most crucial topic of discussion.
The income generated from the collection of taxes from tobacco have, as earlier stated increased the revenue which in the case of BHCI, have many advantages for financing universal health coverage. Taking into consideration the population that is at risk of suffering health related hazards brought about by the usage of tobacco products, the one advantage of the BHCI system is that it pools together all the health risks to a large number of people who contribute towards the funding of its functions. The chief source of funds of the BHCI is the government which as stated Musgrove (2000), attributes 40% of its income to taxation and funds the national health insurance scheme up to 15% of this amount. The health insurance scheme, which makes the largest part of BHCI, is also cited to be the paradigm of tax-based system where by taxes collected by the government are the biggest contributors to its activities.
In summary, the health hazards related to the usage of tobacco and its products can impact negatively to the development goals of any governments. To curb this trend, increasing taxation on tobacco products come with two way benefits that regardless of the criticism it receives from various avenues, its positives are far much influential than when the trading in tobacco products is not regulated. With the revenues collected re-invested in ventures aimed at developing awareness on the effects of tobacco use and funding the health insurance scheme, the hope for controlling tobacco related hazards has never been more promising. To conclude, taxation on tobacco products has in a very effective way helped reduce the negatives associated with its usage.