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IMF pushes higher cigarette tax, scrapping of incentives 

THE INTERNATIONAL MONETARY FUND has urged the government to enact pending tax reform bills, warning that the recent move to exempt minimum wage earners from income tax and the cut in corporate income tax next year could erode revenue collections.

The government has made progress in terms of meeting tax collection targets in the first half, the IMF acknowledged. However, it said this would be unsustainable if no measures would be adopted to offset the impact of lower income tax collection. . . .

The IMF said Congress should pass bills seeking to lift unnecessary tax- and duty-free privileges granted to businesses and increasing excise taxes on cigarettes to maintain, if not accelerate, the growth in tax collection.

Without these measures, the IMF said the tax relief granted to individual and corporate taxpayers could easily slash half a percentage point from the country’s tax effort.

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Govt mortgages tobacco over debt 

IN a desperate bid to pay off its US$273 million debt to the International Monetary Fund (IMF) the government has mortgaged this year's tobacco crop to a tobacco marketing company, Mashonaland Tobacco Company (MTC).

Sources said this week the government has made a forward sale of 35 million kg of tobacco worth US$86 million, more than half this year's expected yield. Between 45 million and 60 million kg is expected this year.

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IMF official says telco, tobacco monopoly sale failures will hurt Bulgaria's economic performance 

IMF official says telco, tobacco monopoly sale failures will hurt Bulgaria's economic performanceSOFIA (bnn)--The head of the International Monetary Fund mission for Bulgaria said Monday the government's failure to privatize state telecommunications company BTC and tobacco monopoly Bulgartabac would hurt Bulgaria's economic performance.

"The privatization deals are not of so big importance for the financial needs of the government but are essential to increase the efficiency of the economy," Jerald Shiff said after talks with Finance Minister Milen Velchev.

Both deals in question have fallen apart in the final phases before their conclusions triggering comments that the government is risking to scare away foreign investors.

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Zimbabwe Rushing Towards Total Economic Collapse, Warns IMF 

The International Monetary Fund (IMF)'s top expert on Zimbabwe says the country is on the brink of an economic crisis that will make the current hardships seem like child's play. . .

The Zanu PF government is the culprit for creating the three-headed monster of declining production in all sectors, artificially low interest rates, and a fictitious fixed foreign exchange rate, Johnson said. Especially with the tobacco selling season over, Zimbabweans are likely to continue to scramble to buy the increasingly scarce foreign currency at any price. With interest rates being held at absurdly low rates, there is no incentive for anyone to hold onto Zimbabwean dollars any longer than they have to.

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• Draft international anti-tobacco treaty is a compromise but has teeth, chairman says 

The world's first ever anti-tobacco treaty looks to be far weaker than originally envisaged, with the emphasis on gradual and flexible measures rather than tough action like cigarette price hikes and blanket advertising bans.

But on the eve of a new and decisive round of talks, negotiating chairman Luis Felipe de Seixas Correa said Monday he had drawn up a draft accord that was a balance between public health ideals and political and commercial realities.

"This represents the middle ground," said Correa, a Brazilian ambassador. But he claimed the "text has a lot of teeth."

Health activists said the document was weak and would have little impact on lessening the death toll from smoking, which stands at an estimated 4.9 million people per year and is expected to soar to well over 10 million by 2030.

"The treaty should be strong enough to eliminate the Marlboro Man," said Kathryn Mulvey of the U.S. campaign group Infact.

Mulvey said her group was "deeply disappointed" that the emerging treaty fell well short of that. Infact and other non-governmental groups have accused the United States, Japan and Germany -- all of whom have powerful tobacco lobbies -- of trying to undermine it.

Activists claim that Correa's text puts trade before health. This is because of a clause stating that nothing in the convention shall infringe on rights under existing international treaties -- like those governing the World Trade Organization.

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For this convention to be effective, it has to be relevant from the public health point of view and command universal adherence. If it doesn't, then no matter how strongly we word the articles, it won't be effective.
Negotiating chairman Luis Felipe de Seixas Correa, whose FCTC draft accord is considered intolerably weak by many.

Protesters Claim IMF Promotes Smoking 

Activists protesting the International Monetary Fund this week in Washington, D.C., are diversifying their anti-capitalist agenda: They say the IMF is responsible for the rising smoking rates in developing nations across the globe.

But according to an IMF report, some countries are economically dependent on tobacco farming. . .

The IMF does not subscribe to Essential Information's theory that raising tobacco taxes is the only way to reduce smoking rates across the globe.

According to study featured in the IMF's quarterly magazine Finance & Development, "Taxation is a blunt instrument."

The study claims that higher taxes on cigarettes may deter young people from ever purchasing cigarettes, but those taxes would also hurt poor adult smokers who have been smoking for years.

And, contrary to the opinion of Essential Information, worldwide governments are urged to consider non-tax measures as an effective way of reducing the public's demand for cigarettes and increasing public health. Those non-tax measures promoted by both the IMF and the tobacco companies include tobacco advertising bans and anti-smoking ads; warning labels on tobacco products; restrictions on smoking at schools, on the job, and in public places; and increasing access to no-smoking programs.

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