Raise Tobacco Taxes to Save Lives and Fix Health Funding, Government Urged
NAIROBI, Kenya, Aug 31 – Stakeholders spanning public health, civil society, research institutes, government agencies, tax administration, youth organizations, development partners and academia convened in Nairobi on August 27, 2026, for the 4th Tobacco Taxation Conference.
The forum focused on the critical role of tobacco taxation in advancing public health and sustainable health financing, coming shortly after President William Ruto officiated the National Health Summit signaling renewed government focus on national healthcare priorities.
Themed “Tobacco Taxation as a Tool for Sustainable Health Financing,” the one-day conference examined how aggressive tax reform can serve as a dual strategy to mobilize domestic resources and curb Kenya’s escalating healthcare burden.
Participants scrutinized current tax policies, discussed strategies to combat industry interference and addressed the alarming surge of novel nicotine products among the youth.
National Taxpayers Association (NTA) Chief Executive Officer Patrick Nyangweso stressed the direct link between tobacco tax policy and Universal Health Coverage (UHC) highlighting Kenya’s strained healthcare infrastructure.
Nyangweso noted that tobacco-related illnesses claim over 12,000 Kenyan lives annually and fuel the rise of non-communicable diseases (NCDs) such as cancer, cardiovascular conditions and chronic respiratory illnesses.
“These conditions place an increasing strain on the health system and impose substantial costs on households through medical expenses, lost income, and reduced productivity,” said Nyangweso.
NTA data revealed that tobacco-attributable deaths occur during individuals’ most economically productive years undermining household welfare and national economic development.
Estimated tobacco-related conditions cause an annual economic loss of KES 40 billion in Kenya through lost productivity, premature death and out-of-pocket medical expenditure.
To address the broader crisis in health delivery, Nyangweso urged the government to establish a centralized National Health Commission a concept previously floated in the Building Bridges Initiative (BBI) to coordinate, regulate, and sustainably finance healthcare.
“Health financing is a critical issue in this country,” Nyangweso stated, pointing to frequent labor disputes and healthcare strikes that leave citizens without vital services for months.
He also raised concerns over the management of the Solatium Fund, which collects a statutory 2 Percent levy from tobacco manufacturers and importers.
Nyangweso insisted that these funds must be transparently ring-fenced to upgrade cancer diagnostic infrastructure, fund public health facilities, and manage tobacco-related diseases.
Despite Kenya’s international commitments under the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), the country’s tax share on tobacco products currently stands at just 30 to 32 percent of the retail selling price.
This falls drastically short of the WHO-recommended threshold of 75 percent, a level proven to meaningfully reduce affordability and consumption.
Nyangweso dismissed financial hardship narratives pushed by tobacco manufacturers, pointing to corporate financial reports showing industry profits surging into billions of shillings.
He argued that record pre- and post-tax corporate profits demonstrate unabated consumption, reinforcing the urgent need for Parliament and the National Treasury to implement aggressive tax hikes.
Stakeholders acknowledged the challenge of porous borders, through which cheap smuggled alcohol and illicit tobacco products enter local communities.
They called for a multi-agency response involving the National Authority for the Campaign Against Alcohol and Drug Abuse (NACADA), the National Police Service, and tax enforcement agencies to clamp down on illicit trade while raising taxes on legal tobacco products.
Beyond taxation, NTA emphasized the need to support farmers in traditional tobacco-growing hubs such as Meru, Busia and Migori. Citing environmental damage like deforestation from tobacco curing and severe occupational health hazards for field workers, the lobby proposed transitioning farmers toward high-value, fast-earning food crops like soybeans, common beans and maize.
John Njenga, a Policy Associate at Tax Justice Network Africa, emphasized that tax regimes should force manufacturers of harmful products to pay for the damage they cause.
”We need taxation regimes that protect young people from initial use, but also ensure that whatever resources are collected go directly into supporting cessation and prevention programs,” Njenga noted.
Benjamin Odhiambo, an advocate with the Students Campaign Against Drugs, warned of an alarming surge in novel nicotine products such as e-cigarettes and nicotine pouches across primary schools, secondary institutions, and universities.
“School administrators are finding young people using these novel products in staggering numbers,” said Odhiambo, noting that recent school inspections have yielded large quantities of confiscated devices.
Odhiambo expressed optimism regarding commitments made at the conference by representatives from the Ministry of Health and the National Treasury.
“Adjusting tax structures to adequately cover emerging nicotine products will simultaneously protect school-aged youth, lower long-term healthcare expenditure, and generate domestic revenue to fund vital infrastructure projects”, said Odhiambo.
Policy experts called for a transition to a simplified, uniform specific excise structure and the implementation of a dynamic tax model based on four key pillars:
Inflation Protection: Fixed excise taxes lose real value over time with automatic inflation adjustments prevent the real tax burden from eroding.
Income Growth: As incomes rise,cigarettes become more affordable even if prices increase.Tax must keep pace with income growthto sustain health impact.
Consumption Monitoring: Rising consumption signals that tax policy is failing. Dynamic taxes respond to consumption trends before health and fiscal costs escalate.
Market and Revenue Response: New nicotine products and market shifts require responsive tax structures. Dynamic policy assures sustainable revenue and closes emerging tax gaps.
Addressing concerns over tax fairness, experts highlighted that lower-income groups are the most price-sensitive.When taxes rise, low-income households quit at higher rates, saving money, avoiding catastrophic healthcare costs, and retaining household income.
Regarding revenue usage, while standard public finance frameworks direct all tax proceeds into the Consolidated Fund, they argued for strategic earmarking.
Ring-fencing tobacco tax proceeds for Universal Health Coverage (UHC), tobacco cessation, and NCD prevention offers Transparency and accountability.
However, experts noted that robust governance, independent oversight, and clear public reporting are essential to prevent misallocation.
The Taxpayers Association highlighted that Kenya Should Raise and Index Taxes: Progressively increase tobacco tax rates toward the WHO 75 percent benchmark and index them to inflation and income growth.
Simplify Tax Structures: Transition to a uniform specific excise tax structure for improved transparency and compliance.
Tax Novel Products: Rapidly incorporate e-cigarettes and nicotine pouches into the national tax framework to eliminate arbitrage loopholes.
Strengthen Enforcement: Expand track-and-trace systems and excise stamps to curb illicit trade and porous-border smuggling.
Ring-Fence Health Funds: Transparently direct Solatium Fund levies and earmarked tax revenues toward UHC, cancer diagnostics, NCD prevention and cessation programs.
“Tobacco taxation is both a health intervention and a domestic resource mobilization instrument and an investment in sustainable health financing”.
“The greatest value of tobacco taxation is not simply the money collected today it is the combination of revenue generated, diseases prevented, healthcare costs avoided, and productivity protected.”
