Dumb ax

Dumb ax

Nov 12, 2009 at 21:06 | Editorial
Rather than protecting the evil tobacco industry or siding with it to punish an opponent, President Victor Yushchenko should lead the charge to help hooked citizens break their deadly addictions.

If there is one area where Ukraine should sharply increase taxation, it’s on deadly cigarettes and alcohol products.

Unfortunately, this is something Victor Yushchenko, a president who has become increasingly destructive during his final months in office, either does not understand, or chooses not to recognize.

On Nov. 11, Yushchenko vetoed a law adopted by parliament that would follow up on recent increases on cigarette excise taxes championed by his bitter rival, Prime Minister Yulia Tymoshenko.

Perhaps the tobacco industry is among Yushchenko’s remaining few friends and financial backers? Whatever the case, this tax ax is plainly dumb.

The president defends his position by mouthing tobacco industry arguments. He claims that, by increasing taxes, domestic production of this killer product would fall, jobs would be lost and the market would be flooded with contraband shipments from Russia. Nonsense. Not only does the president have his facts wrong, his motives appear to be malicious.

His nonsensical argument provides yet another example of how this once-perceived Orange Revolution hero puts his personal interests above that of the country he is supposed to be leading. Much like his blocking of additional assistance from the International Monetary Fund, his aim in this devious position is to further starve Tymoshenko’s government of tax revenue ahead of the Jan. 17 election, making it difficult for her to pay pensions and wages on time, thereby undercutting her presidential bid.

By maintaining the lowest cigarette prices in Europe, policymakers shorten the lives of Ukrainians, more than 100, 000 of whom die annually from smoking-related illnesses. Global experience has shown that people smoke more when cigarettes are cheap. At least 30 percent of Ukrainian adults smoke regularly, one of the highest rates worldwide. This places a costly burden on the nation’s decrepit health-care system.

The scuttled tax hike would have raised the price of a pack of Marlboros, the world’s best-selling brand, from Hr 8 to Hr 10.80. In Russia, they sell for Hr 12 and in Poland it is Hr 29. The modest hike also would have raised the cheaper brands in Ukraine by Hr 1, but most would still sell for less than $1 per pack.

Yushchenko’s argument that domestic cigarette production and jobs would be lost is sinister, considering that cigarette production is largely automated and the country churns out “cancer sticks” at a rate far exceeding domestic demand. In fact, Ukraine has become a source of cheap, often smuggled, cigarettes for other countries.

Rather than protecting the evil tobacco industry or siding with it to punish an opponent, a true leader with genuine concern for the nation’s future would lead the charge to help hooked citizens break their deadly addictions.

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