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  • By Mar-Vic Cagurangan

$4 a pack? Holy smoke!

Guam’s tobacco tax is one of the highest in the nation

tobacco tax

The government certainly wants you to quit that nicotine habit — unless you are willing to dig deeper into your pocket. Tobacco tax on Guam went up from $3 to $4 per pack effective Aug. 24.

Depending on the brand, a pack of cigarettes on Guam currently costs between $5 and $7. The new tax hike will further boost the price per pack. Stick that in your pipe and smoke it. This is a tax imposition – sort of a penalty for smoking — that lawmakers won’t apologize for. “Sin tax,” it is called — a tax on items considered undesirable or harmful such as alcohol or tobacco.

Proposed by Sen. Joe San Agustin, the tobacco tax hike has been incorporated into Speaker Benjamin Cruz’s 2019 budget that Gov. Eddie B. Calvo allowed to lapse into law without affixing his signature.

Cancer prevention advocates welcomed Guam’s tobacco tax increase as a life-saving and revenue-generating policy. “We know that significant price increases of at least $1 per pack of cigarettes helps people who use tobacco quit successfully,” said Cory Chun, government relations officer of the American Cancer Society Cancer Action Network Hawaii Pacific “It also prevents young people from starting a deadly addiction in the first place. Fewer smokers in Guam will lead to less people developing cancer and other tobacco-related diseases, and reduced spending on treating these horrendous health effects from smoking.”

Tobacco use is the No. 1 one preventable cause of death in Guam, where nearly 27 percent of locals still smoke, significantly higher than the U.S. average. More than one in four adults on island and two in 10 of high school students still smoke, much more than the U.S. average

“Over the last eight years we have made progress in reducing the burden of tobacco related illness on our island but more needs to be done. We applaud the efforts of our partners and leaders who have contributed to this effort. We must all do our part in reducing the burden of non-communicable diseases where we live, learn, work, play and practice our faith,” said Patrick Luces, acting administrator of Bureau of Community Health Services, an agency under the Guam Department of Public Health and Social Services. “Tobacco tax increases are the single most effective policy to reduce tobacco use.”

The Campaign for Tobacco Free Kids said tobacco tax increases offer a win-win solution to improving the health of residents and balancing budgets. “It is a health win, a budget win, and a political win. A health win because it reduces tobacco use. A budget win because it increases revenue. Finally, a political win because it is the will of the public,” the group said.

tobacco tax

Since 2014, youth smoking rates on Guam have dropped 5 percent, according to government survey. In January, Guam joined several states and more than 300 municipalities where tobacco smoking age has been raised from 18 to 21. “Armed with facts instead of fear — young people, health care professionals and countless community advocates persisted, and, because of their work, this bill is now law,” Speaker Benjamin Cruz said when his bill lapsed into law without the governor’s signature in March 2017.

At $4 per pack tax, Guam’s tobacco tax is among the highest in United States, where the state average is $1.75. According to the Campaign for Tobacco Free Kids, the highest combined state-local tax rate is $6.16 in Chicago, IL, with New York City second at $5.85 per pack. Other high state-local rates include Evanston, IL at $5.48 and Juneau, AK at $5 per pack and Puerto Rico, $5.10. Missouri has the lowest at 17 cents per pack. Georgia levies 37 per pack, and North Carolina, 45 cents.

On Guam, there is no government record that shows the actual collections from tobacco tax, which is among the sources of the government of Guam’s tax leakages. The Office of Public Accountability’s audit report released in May revealed that tobacco. The report states that “99 percent of tobacco taxes are not collected immediately because the law allows importers (tobacco wholesalers) to delay tax payments on tobacco products it stores in private warehouses, when authorized by the Department of Revenue and Taxation.”

The new tobacco tax hike is projected to generate $9.35 million a year. This would add a significant dollar amount to the Healthy Futures Fund, provided this tax will actually be collected instead of ending up in smoke.

 
 

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