by admin on | 2025-11-25 00:45:30
In its 2025 Supplementary Budget, the Zambian government has increased the excise duty on cigarettes from K452 to K750 per 1,000 sticks. The taxes on spirits and wines have seen an even more significant rise—from 60% to 80% of the retail price. While the official reason is to enhance domestic revenue, the more profound victory is in the realm of public health.
This is not merely a financial adjustment. It represents a moral rectification.
The Cost of a Cigarette
In Zambia, a single cigarette is priced lower than a lollipop. A complete pack often costs less than a loaf of bread. For the schoolchild in Kanyama, the bus driver in Chipulukusu, or the market vendor in Masaiti, tobacco is not only affordable but also perilous.
However, the taxes imposed on it have historically been among the lowest in the region. In 2016, only 37.3% of the retail price of cigarettes in Zambia was attributed to tax—significantly below the World Health Organization’s recommended 75% and the global average of 56% (WHO, 2021). Between 2002 and 2016, the inflation-adjusted price of factory-made cigarettes nearly halved (Goma, Ililonga & Drope, 2011).
This low cost is no coincidence. It stems from policy stagnation and the influence of the tobacco industry. And it has resulted in catastrophic consequences.
The Burden of Addiction
Tobacco consumption claims the lives of over 7,100 Zambians each year—most of whom die before reaching 70 (WHO FCTC–UNDP–UN NCD Task Force, 2024). This is akin to a 20-seater minibus crashing into the Zambezi every single day, or fifty Marco Polo buses filled with passengers igniting and perishing in flames annually.
The Ministry of Health estimates direct healthcare costs at ZMW 154 million, with total economic losses soaring to ZMW 2.8 billion each year. These expenses disproportionately affect low-income families, who must pay out-of-pocket for medical care and suffer income loss due to illness and caregiving.
In a recent presentation to Civil Society stakeholders, Robert Mwale, the Lead Public Finance Researcher at the Centre for Trade Policy Development (CTPD), emphasized a stark reality: "We are subsidising addiction. The true cost of tobacco manifests in hospital beds and funeral expenses. Zambia’s health financing issues are not merely technical—they are existential."
Mwale elaborated on four interrelated pressures:
1. Volatile and declining external aid: The National Health Strategic Plan (NHSP) anticipates US$2.5 billion in donor support, with US$1.7 billion coming from the U.S. alone. This instability complicates medium-term planning.
2. Rising debt servicing: In 2023, debt accounted for 25.8% of total expenditure and 44.7% of tax revenue. Projections for 2024 suggest these figures will rise to 33.1% and 55.1%, respectively.
3. Underinvestment in health: Zambia's health budget falls short of the Abuja Declaration’s 15% target. Mwale points out, "If Zambia increased its allocation to just 12%, the NHSP funding gap would decrease to 2%. Achieving the Abuja target could yield a 22% surplus."
4. Rising burden of non-communicable diseases (NCDs): The risks associated with tobacco, alcohol, and poor diet are escalating future health costs and further straining already limited resources.
A Budget Represents a Moral Commitment
Zambia’s struggle with tobacco is not merely a health issue—it’s an economic one. Annually, smoking inflicts over ZMW 1.59 billion in healthcare costs and lost productivity on the nation. The overall burden of non-communicable diseases (NCDs) surpasses ZMW 3 billion each year.
"The inability to achieve the Abuja Declaration target not only underscores a funding shortfall but also reflects a failure to prioritize health as a key driver of social and economic progress."
—Isaac Mwaipopo, CTPD Executive Director
The Effectiveness of Health Taxes
Experts from the Centre for Trade Policy Development assert that excise taxes on tobacco, alcohol, and sugary beverages effectively diminish harmful consumption while generating consistent revenue. These taxes are:
• Resilient: Revenue remains stable through various economic conditions
• Equitable: Lower-income households benefit disproportionately
• Popular: Public approval increases when funds are transparently allocated to health initiatives
A 10% rise in tobacco prices can lead to an 8% reduction in consumption in low-income nations. In Zambia, this change could save countless lives and yield billions in revenue.
Africa’s Financial Strategy: Domestic, Innovative & Blended Funding
The Africa CDC proposes a three-pronged approach:
1. Increased domestic funding
2. Innovative strategies such as solidarity levies and targeted health taxes
3. Blended financing with alignment from donors
The objective: to achieve at least 50% domestic health financing in over 20 countries by 2030. Effective governance and efficiency could unlock an extra $3.4 billion each year across the continent.
Taxation Strategies and Implementation
Zambia can implement best-practice design strategies:
• Tobacco: Increase specific excise taxes or establish a minimum floor; adjust annually for inflation and income growth; eliminate loopholes
• Alcohol: Transition to volumetric excise taxes based on pure alcohol content; standardize across categories
• Sugary Beverages: Implement a tiered tax based on sugar content
• Administration: Utilize digital stamps, track-and-trace systems, and enhance customs collaboration
• Earmarking: Allocate a portion of revenue to the NHSP and NCD prevention to maintain public support.
Regional Insights
• South Africa: Strategic taxation on tobacco, alcohol, and sugary beverages has successfully reduced consumption while increasing revenue.
• Kenya: The implementation of digital tax stamps has enhanced compliance and diminished smuggling activities.
• Rwanda: Adherence to Abuja commitments and nearly universal health coverage have resulted in significant improvements in mortality rates.
A Call to Action
Zambia's recent increase in taxes marks a positive development. However, it must be accompanied by strong enforcement, clear allocation of funds, and a commitment to resist industry influence.
Health taxes are not merely a source of income—they represent a quest for justice. They aim to safeguard the health of Zambians—both those already here and those yet to come—from avoidable harm. They embody a choice for health over wealth, and a focus on future generations over immediate profits.
Ends…///
By Muloboka Albert Phiri,
The Author is Chairperson of the Tobacco Control Consortium of Zambia (TCCZ)
