In order to collect more revenue to fight health risks of smoking, the Ministry of Finance has announced it will begin requiring local tobacco companies to buy stamps and attach them to cigarette packs.
Companies will have to estimate the number of packs they will sell and purchase the seals in advance, said Pen Siman, director for the Finance Ministry’s custom authority. The ministry had not yet determined a price for the stamps, he added. The requirement means tobacco companies must buy a machine to affix the stamps.
The ministry will require that the seals be purchased starting Nov 1, and will expect all cigarette packs to carry the seal by Feb 2, 2002. The tax revenue will go toward covering health expenses of patients who smoke, Pen Siman said. The seals will make it easier for the government to collect revenue, Pen Siman said.
The ministry is not replacing taxes with the stamp, he said.
Companies that do not abide by the new regulation will be charged under smuggling articles of the tax law, he said.
The tax department and the customers’ department will be authorized to seize the products of companies that use fake or expired stamps, a ministry statement said.
While the Ministry of Health does not know the amount of cigarettes sold by local factories, the tobacco industry sold 350 million packs in Cambodia in 1997, said Po Samnang, vice director for the ministry’s Center for Health Promotion. He said tobacco-related health costs for Cambodians between 1997 and 2007 are estimated to be about $420 million “without intervention.”
Education campaigns and tax increases could cut those costs to $383 million, he said.
One of those factories belongs to British American Tobacco, producer of such brands as Ara and 555 cigarettes. The company would have no problem paying for the stamps, said Kong Triv, a company official. Better seals would mean less fake brands or smuggled cigarettes and “fair competition,” he said.