The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Fears of a further hike in the 220 percent tobacco tax rate were yesterday branded premature, a Cabinet Minister revealing legislative reforms are "not yet ready for prime time".

Dr Duane Sands, minister of health, told Tribune Business that the draft Tobacco Control Bill was "awfully draconian" and needs further work, with "absolutely no decision" taken over any taxation increase.

He was responding after an e-mail, sent by an organisation called itself the Bahamas Premium Cigar Association (BPCA), hit out over what it described as the government's efforts to impose an additional "sin tax" on high-end, premium cigars through the bill.

Michael Maragh, the Association's president and e-mail sender, did not respond to Tribune Business' reply requesting comment. He argued, though, that there was no need for heavy-handed regulation or extra taxation on cigars as studies had shown they carried "nowhere near the same level of risk" to health as other tobacco products.

Describing the existing 220 per cent taxation rate as "stifling" for a niche that is popular with high-end tourists, Mr Maragh added that "this already oppressed retail industry would effectively be killed off" should the Government seek to extract further revenue.

Suggesting that the Bahamas was out of line with other countries that have created special 'exemptions' for cigars, he said: "In addition to retailers, there are at least two Bahamian producers of premium cigars, one which has achieved international fame for its products. These enterprises would also have to close their doors in response to a 'sin tax' and the heavy operating restrictions being considered, terminating dozens more jobs in the process.

"At the time of the earlier tax hikes, a plan was afoot by several members of this association to found a local tobacco farm and premium cigar factory on a Family Island, which would have employed 100 rollers and at least as many farmers, creating an overnight cultural attraction and introducing new, lucrative and internationally sought-after skills to the country."

Mr Maragh continued: "Sadly, that project came to nothing due to the high-handedness of a previous government. The plan has recently been revived, with Grand Bahama as the intended location, and we urge this FNM government not to take any steps that would destroy this significant economic opportunity.

"The BPCA is hereby requesting that the Government exempt premium, high-end cigars from any sin tax to be imposed on other tobacco products and reduce the current 220 per cent tax on premium cigars."

Dr Sands yesterday confirmed to Tribune Business that his Ministry had begun consultations over the draft Bill, which has been in the planning stages for at least three years as part of the Bahamas' efforts to meet its World Health Organisation (WHO) obligations.

His predecessor, Dr Perry Gomez, referred to the Tobacco Control Bill during the 2015 mid-year Budget communication, and Dr Sands yesterday revealed that the deadline the Bahamas had given for passing this legislation was now "fast approaching".

Emphasising that key policy decisions in relation to the Bill have yet to be taken, Dr Sands suggested the Association's fears were premature and an effort "to piggyback on some of the public opinion about gaming" and so-called 'sin taxes'. He urged it to address its concerns to the Government.

"The Bahamas is a signatory to the WHO Convention on Tobacco Control," Dr Sands said, explaining the motivation behind the Bill. "A number of years ago we would have given an undertaking that we agreed with the principles of reduced access to tobacco, to make tobacco products more expensive, minimise advertising targeted at children and a number of other things.

"As is often the case, the deadline we agreed is fast approaching. There is now being circulated for consultation a Tobacco Control Bill. It's very easy to make these commitments, but now we've got to act on it."

Moving to soothe the Association's concerns, Dr Sands said the Bill was in no condition to be presented to Cabinet or Parliament. "When I look at the legislation it's not really ready for prime time," he added.

"It's awfully draconian. The people that processed the legislation wanted it to be really aggressive and, as far as they were concerned, nobody in the world should be smoking. The legislation speaks to the elimination of all indoor smoking, the elimination of tobacco images on any advertising; any paraphernalia becomes illegal to have that.

"It speaks to tax levies on tobacco products being increased to make them less attractive, the creation of a Tobacco Control Board to look at control and on and on."

The Minister of Health added that health and safety concerns needed to be weighed alongside the "economic reality", and said: "As a country, since we have very weak tobacco control laws, we have to decide how far we want to go with this."

He pointed to the fact Baha Mar's new casino, the largest in the Caribbean, was built without any laws relating to tobacco controls. Forcing the Cable Beach mega resort, and its Atlantis rival, to deploy "air scavenging devices", deploy segregated areas or eliminate indoor smoking "raises the question of violating their existing Heads of Agreement".

The Bahamas Premium Cigar Association (BPCA), in its statement yesterday, called for its products - which it said generated income for "hundreds of Bahamians" - to be exempted from the Bill's "more onerous provisions".

It listed these as including as including regulations that will "effectively end cigar smoking on golf courses, in luxury airport lounges and on casino floors". The Association said this caused a "sharp decline in casino revenues" when tried in Las Vegas.

It also cited advertising restrictions, which it alleged would prevent Bahamian luxury cigar producers from promoting their products via their own social media pages, or advising the public about rolling events and showcasing their skills at cultural festivals.

The Association also warned against prohibitions on purchasing and selling cigar-branded lighters, cigar ashtrays, cutters, cases or humidors, and called for at least two tobacco industry members to be appointed to the Tobacco Control Board.

"The BPCA encourages the Bahamas government once again to embrace this huge economic opportunity for Bahamians, and allow it to flourish to the benefit of local employers, workers, the tourism industry and the country's economy generally," the statement concluded.

Dr Sands yesterday conceded that different stakeholders had different views, and said: "All of this has to be grappled with, and we have to come up with a position that makes sense for the Bahamas.

"We have made absolutely no definitive decisions on the wording of the final legislation. We have made no decision on taxation, if any, and at what level. A lot of these policy decisions have to be made but have not yet been made.

"It's an active matter. We have to deal with it. We are actively dealing with it. Opinions are coming in, and we have begun the process of engaging the various business houses and stakeholders. We'd like to know what they think, and the implications for their business and so forth. Whether there's a distinction between cigars and cigarettes, that's a decision for a different day."