JOHANNESBURG - Tobacco company Philip Morris South Africa (PMSA) on Thursday welcomed finance minister Tito Mboweni’s announcement of introducing excise tax on heated tobacco products at a lower rate than cigarettes.
During his tabling of the 2020 budget in parliament on Wednesday, Mboweni said heated tobacco products would start being taxed immediately, at the rate of 75% of traditional cigarettes. Taxes on electronic cigarettes, or vapes, would be instituted from 2021.
Managing director of PMSA, Marcelo Nico, said: "By creating this differentiation, minister Mboweni and his team recognise the role that taxation can play in encouraging adult smokers to switch to less harmful tobacco products".
"The best choice any smoker can make is to quit nicotine and tobacco entirely. Those who would otherwise continue smoking should change to a less harmful alternative."
Nico said tobacco harm reduction entailed replacing products that were known to be harmful with products that were "scientifically substantiated" to be less harmful, although less harmful did not mean risk-free.
This approach was being applied in a growing number of countries alongside traditional tobacco control measures, he said.
There was a growing body of evidence, he added, that regulating less harmful tobacco products differently to cigarettes could reduce smoking rates, which was beneficial overall to public health.
"Cigarette smoking is the most harmful form of tobacco consumption. Smokers deserve access to and accurate information about less harmful alternatives. This new tax category is a step towards encouraging those who would otherwise continue smoking to change to less harmful alternatives," said Nico.
He said PMSA’s investment in smoke-free alternatives would rise to R650 million this year.
Globally, the company has made a public commitment to replace cigarettes with less harmful products as soon as possible, said Nico.
The less harmful products currently constituted 92% of its research and development budget, 60% of its global commercial spend, and 20% of revenue just five years after commercialising the items.