Raising taxes on tobacco is among new revenue measures being considered by the Lolo Administration for submission to the Fono, says Iulogologo Joseph Pereira, the governor’s executive director. This was revealed after Samoa News emailed Iulogologo pointing out that the World Health Organizations theme for this year’s May 31 smoke out was “Raising Taxes on Tobacco.”

On May 31 every year, the World Health Organization celebrates ‘World No Tobacco Day’ highlighting the health risks associated with tobacco use and advocating for effective policies to reduce tobacco consumption.

This year’s theme was “Raising Taxes on Tobacco” and WHO says raising taxes on tobacco is both the most effective and cost-effective way of reducing tobacco use around the world.

Last Saturday the annual event was observed in the territory with a proclamation by Gov. Lolo Matalasi Moliga, who urged urge all smokers to refrain from smoking on this day (May 31) in the hope that it is a beginning of a life as a non-smoker.”

In questions emailed to Iulogologo, Samoa News first pointed out this year’s theme—which is to raise taxes on tobacco. Based on the theme, Samoa News asked: “what’s the administration’s plan of possibly raising the tobacco tax? Also, has the administration discussed over the past months the possibility of raising the tobacco/cigarette tax?”

Iulogologo responded that revenue forecasts for the fiscal year 2015 budget are being developed and new revenue measures are being considered to raise the revenue posture of the American Samoa Government.

“Tobacco Tax is one of the measures being considered,” he said via email from Honolulu. “Analysis is being conducted canvassing historical figures connected with tobacco tax revenues, along with consideration of possible push back revenue losses because of possible consumption reduction or black market proliferation which will demand greater administrative scrutiny to prevent the practice which is believed to be existing today.”

There have been talks in the Fono over the past several months regarding the possibility of  raising the cigarette/tobacco tax as an effort to reduce diseases that are linked to smoking, but nothing has been put forth in a bill form for lawmakers to consider.

The last time the government moved to hike cigarette/tobacco taxes was in 2011 when then Gov. Togiola T.A. Tulafono sent to the Fono legislation that would hike the tax from 12.5 to 17.5 cents per cigarette, per cigar or per 10 grams of smoking tobacco.

Perhaps one of the major obstacles faced by the administration at the time in getting the bill approved was that the government was not convincing enough in their testimony as to how ASG would make up for the lost revenue if there was a drastic drop is cigarette sales due to the proposed hike.

The measure, which included a provision to hike the tax on alcohol and beer, died a slow death in committee, although the Togiola Administration tried to reintroduce the same measure in 2012, — an election year — but failed.

A Feasibility Study of a Cigarette Tax Stamp Program in American Samoa released in August 2011 states in part that it is well documented that increasing taxes on cigarettes is an effective tool in reducing tobacco consumption (especially among younger and lower income smokers), yet the argument that raising these taxes will lead to increased cigarette smuggling is often used to prevent such tax increases from being implemented.

“By countering concerns about cigarette smuggling and thus supporting the passage of increased cigarette taxes, tax stamps aid in the effort to reduce tobacco consumption among the general public, according to the 28-page study which followed a May 2011 report by the Territorial Audit Office that recommended that ASG implement a cigarette tax stamp program in order to control and prevent this smuggling.