Bhutan reverses sales ban on tobacco

Kashish Aneja and Sanjana Gopal

In 2010, Bhutan was lauded globally for being the first country to ban tobacco sales and smoking in public places. The ban lasted for over a decade until the circumstances posed by the COVID-19 pandemic compelled policy makers to change course, legalising the sale of tobacco within the country.

In 1989, local government leaders in Bumthang, the religious heartland of Bhutan, endorsed a ban on tobacco sales in the district. Discussion in the 70th National Assembly Session highlighted that smoking was considered reprehensible regardless of whether it was viewed from a religious or a public health lens.

Bhutan embarked on its journey towards a tobacco-free society by ratifying the WHO Framework Convention on Tobacco Control (FCTC) on 23 August 2004 followed by a nationwide ban on the sale of tobacco the same year. This represented the strong political will of the government and the collaborative enforcement of tobacco control measures steered by the Bhutan Narcotics Control Authority. Interestingly, Bhutan faced no organised opposition from the tobacco industry while instituting the ban on tobacco sales.

Building on the nationwide sales ban in 2004, the Tobacco Control Act, 2010 imposed a comprehensive ban on all tobacco products in Bhutan. The law prohibited cultivation, manufacture, supply and sale of tobacco products; imposed bans on advertisements, promotion and sponsorship of tobacco products along with restrictions in films; declared smoke-free public places or zones; and also prescribed a labelling requirement for display of country of origin and health warnings on tobacco products. Tobacco consumption, however, was not banned. Import of tobacco products for personal consumption was permitted, but taxed. The law also levied a sales tax of 100% for imported tobacco products from India and an additional custom duty of 100% for tobacco products from other countries. The Tobacco Control Regulations, 2013 and the Tobacco Control (Amendment) Act, 2014 imposed limitations on the quantities that could be purchased for personal consumption and required declarations of importer’s identity. The law also prohibited the illegal sale of tobacco and the use tobacco products in public places, punishable under the Penal Code Act of Bhutan, 2004

Despite the existence of a robust legal and regulatory framework for tobacco control, smuggling and a black market for tobacco was rampant in Bhutan. Tobacco use in Bhutan has not decreased significantly, with a tobacco use prevalence of 24.8% and 23.9% as per the STEPS 2014 and 2019 respectively.

After the onset of the COVID-19 pandemic, the Bhutanese government deliberated the Tobacco Control (Amendment) Bill, 2021 in response to the increased smuggling of tobacco across international borders that had raised concerns of cross-border transmission of COVID-19 despite border closures. In July 2021, the government amended the 2010 Act lifting the decade long ban on tobacco sales and permitting the sale of tobacco products in grocery and ‘pan shops’. Bhutan Duty Free Limited was made responsible for providing tobacco stocks to authorised micro general outlets . Under this notification, sellers are barred from the sale of loose cigarettes and are required to seek identification and proof of age from buyers and maintain records of their sales.

The taxation regime also witnessed significant changes during the COVID-19 pandemic. The Tax Act, 2021, which came into force in July 2021,  revised sales tax on tobacco from 100% to 0% until the implementation of the new GST Act, 2021, (which was scheduled to come into force in July, 2022 but was deferred until July 2024), effectively reducing taxes on tobacco by 100%.  However, in November 2022, the Bhutanese government reinstated the 100% sales tax on tobacco-related products and increased custom duty by 10% under the Tax Act, 2022.

Bhutan continues to ban production and manufacturing of tobacco and tobacco products within the country. Sale of tobacco and tobacco products to minors is still prohibited, and sale of tobacco and tobacco products in the vicinity of schools, monasteries (dzongs), hospitals, clinics, basic health units (BHUs), and heritage sites is not permitted.

Claims by the Bhutanese government suggest that the overhaul of the ban on tobacco and tobacco products in the country is a temporary measure. The framework for tobacco control has now shifted from a ban to regulation, raising concerns around the inadequacy of legal and policy infrastructure to support such regulation, including labelling measures and the taxation regime. Permitting the sale of tobacco and tobacco products by state owned retailers would likely increase availability and access to tobacco products. Albeit possibly a temporary measure, taxes on tobacco and tobacco products have been halved raising concerns around increased affordability of tobacco products. Increasing excise taxes and prices on tobacco products is one of the WHO’s ‘best buys’ – most cost effective –interventions for tobacco control.

Considering the increased access, availability and affordability of tobacco products in Bhutan, WHO recommendations including plain packaging, health warning label requirements, and earmarking of taxes should find place in the newly developing legal infrastructure.

There is also a rising concern of increased initiation and consumption of tobacco among the Bhutanese youth. Bhutan lacks regulations specific to newer tobacco products such as ENDS/ENNDS and HTPs and evidence suggests that electronic cigarettes are particularly appealing to the youth and act as an initiation product.

The healthcare economic burden of permitting the sale of tobacco within the country has not yet been evaluated and might have far-reaching consequences for a healthcare system that is largely publicly funded and dependent on neighbouring countries.

Bhutan’s transition from prohibition to legalisation of tobacco is likely to burden its healthcare system and raises alarms for strengthening its tobacco control framework in line with the WHO FCTC. The government must employ mechanisms to create awareness, launch media campaigns and health promotion activities to deter consumption of tobacco and tobacco products among individuals. With a likely increase in tobacco use in the country, the government needs to provide cost-covered, effective and population-wide support for tobacco cessation.

Given that the historic tobacco regulatory changes in the country were in response to the COVID-19 pandemic, moving forward, in a post-COVID world, the Government should clarify its stance on tobacco control and set targets in line with its international commitments.

Kashish Aneja is a Legal Advocate at the Center for Transformational Health Law, O’Neill Institute for National and Global Health Law at  Georgetown University, Washington DC, USA. Sanjana Gopal is an Analyst at the Quality Council of India.

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