Uganda finally taking a stand for effective alcohol regulation
- Health & Security
- Alcohol, Kenya, Public health, Tax evasion, Tax stamps, Taxes, Uganda
- EAM Editorial Board
In a long-overdue move, Ugandan authorities have approved the National Alcohol Control Policy in a bid to curb alcohol abuse nationwide. With Ugandans among the highest consumers of alcohol in Africa— more than one-fifth of the population engages in binge drinking—and the alcohol industry pushing back against effective regulation at every turn, such a public health crackdown by Kampala will be no small undertaking.
Until now, Uganda has had no written alcohol policy, and still has scarce regulation of alcohol availability and advertising. Kampala’s newly minted Alcohol Control policy addresses several key issues: intoxication, public safety, health impacts, the availability of alcohol, and research into alcohol abuse. In an effort to combat drink-driving, a major cause of road accidents in the country, the policy requires an increase in the number of breath-testing checkpoints for drivers and recommends the suspension of offenders’ driving licenses.
“The policy was approved with the main objective of raising community awareness about the degree and determinants of the health, social, and economic problems associated with harmful use of alcohol,” remarked Suubi Kiwanuka, an official at the Uganda Medical Centre in Kampala.
The move is an encouraging sign that Kampala is determined to finally crack down on some of the issues which for a long time have both undermined Ugandan public health initiatives and cut into government tax revenues.
Dangerous sachets on the way out
Recent efforts have targeted the sale of alcohol in individual sachets, including small plastic packets of spirits as potent as 45% proof. Often costing as little as 13 US cents, the sachets are favoured by low income earners— and schoolchildren.
“Because this alcohol is affordable, people carry it in their bags, their geometry sets, in their pockets,” explained Amelia Kyambadde, Uganda’s Minister of Trade and Co-operatives. “Its consumption rate has been very high.”
The health risks posed by these pocket-sized sachets are substantial. Multiple studies have found that spirit sachets consistently contain more than just alcohol; carcinogens such as ethanol, arsenic, chromium and lead are often part of the package. With close to one-third of Ugandans beginning to consume alcohol before their 14th birthday, ridding the market of these sachets is a critical first step in Kampala’s efforts to ensure a healthier population.
Cracking down on illicit tipples
A multi-sectoral task force launched by Kyambadde will be enforcing the ban, including officials from the ministries of health, internal affairs, finance, trade, education and local government. Also involved is the Uganda Revenue Authority (URA), which is currently deploying its own campaign to combat the sale of illicit and contraband beverages.
Parallel to Uganda’s newly-codified national alcohol policy and the ban on alcohol sachets is the installation of a new system that has proven highly successful in neighbouring Kenya: the introduction of digital tax stamps, allowing consumers and retailers alike to verify that certain products are genuine—and that tax has been paid on them.
The tax stamp system targets both heavily regulated products, such as beer, spirits, wines and tobacco, as well as common consumer goods like mineral water and soda. In addition to protecting consumers from fake products and curbing tax evasion from under-the-table sales, the URA says the new digital system will also improve the import process. In Kenya, the same system has reduced the number of days for clearing customs from 28 days to four.
Uganda’s similar tax stamp system is due to take effect this week, on 1 November 2019.
Backlash from covert interests
The country’s manufacturers, importers and distributors, however, have not been pleased by the new changes. Some have complained that the implementation cost of the new initiative should be borne by the government. A more troubling reason for the industry’s pushback, however, is the fact that manufacturers and distributors have long benefited from not only neglecting to declare sales, but also engaging directly in the black market trade of smuggled goods.
The tobacco industry is a glaring example of this: with an almost entirely opaque supply chain, it has thus far been close to impossible for authorities to trace where cigarettes come from, where they are going, and whether any tax has been paid on them. This also means that any Ugandan customer, irrespective of if they enter a national chain or corner store, has no way of knowing if the pack purchased is legal or illicit.
Despite opposition from manufacturers and distributors worried about their bottom lines, Uganda’s Revenue Authority is, fortunately, determined to push ahead regardless. It has good reason to be optimistic: through their own initiative, the Kenyan Revenue Authority was able to seize more than 350,000 illicit packs, secured a 100 percent prosecutorial success rate in over 400 cases, and increase excise revenue collections by more than half.
Higher compliance with taxes on consumer goods, then, is likely to dissuade abuse of harmful substances through higher price tags while removing illicit goods from the market. At the same time, plugging national tax leaks will pad Kampala’s coffers, a sure windfall for future public health initiatives. It’s a sign that Uganda is on track to reap both financial and community benefits from these new controls.