Month: June 2021

Leaked: Bloomberg-funded ‘Campaign For Tobacco-Free Kids’ Global Strategy to Ban Vaping Products By Bribing Public Bodies

To people in the United States, billionaire Michael Bloomberg is most well-known as a swashbuckling former New York City mayor who blew a lot of money on an ill-fated presidential primary run.

But around the world, his network of charities and selected groups he provides with millions of dollars in grants are, for all intents and purposes, a sort of private government who influence government leaders, fund the entire salaries of public health officials, and write legislation that is then introduced into legislative bodies, including the recent example of vaping bans in Mexico and the Phillippines.

Some of these organizations are those directly chaired and controlled by Bloomberg, including Bloomberg Philanthropies, but most are various campaign groups that rely heavily on funding and guidance from the New York City billionaire, including those focused on the environment, education, public health, and general tobacco control.

According to the latest article from Michelle Minton at the Competitive Enterprise Institute, who was able to get her hands on internal documents from the Bloomberg-funded Campaign For Tobacco-Free Kids organization, the pernicious impact of the campaigns to target developing countries goes much beyond standard tobacco-control measures such as taxes, age-gating, and advertising restrictions.

Influence and Cash-Strapped Governments

Instead, there are direct payments offered to government bodies and public health officials that implement the CTFK wish-list of legislation. Because developing nations spend less on public health measures and programs than developed nations, foreign NGOs that seek specific policy measures in exchange for millions of dollars in public funding are granted immense influence.

As such, rather than actual domestic democratic demand for measures against tobacco and vaping products, including all-out bans on vaping flavors and technology, these nations pass laws in direct exchange for grants, often much larger than their own domestic department budgets. In other contexts, this would rightly be defined as bribery.

Considering Michael Bloomberg’s charities have spent nearly $700 million globally to hurry these measures into law, the long arm of the global anti-tobacco advocacy movement has already chalked up several success stories.

In government, CTFK and its partners engage in lobbying, like most other advocacy organizations, but CTFK’s strategy for influencing tobacco policy really hinges on establishing itself as an indispensable resource for regulators and lawmakers. For example, the CTFK plan lists myriad examples of support it has provided to government entities, such as assisting in lawsuits against the tobacco industry in Brazil, Peru, Uruguay, Uganda, Nigeria, and Kenya. In Panama, it notes “collaboration with the Ministry of Health of Panama who is interested in financing a regional effort” for tobacco litigation.

Michelle Minton, Exposed: Bloomberg’s Anti-Tobacco Meddling in Developing Countries

The documents outline the efforts of campaigners from CTFK to pass various tobacco control and anti-vaping measures in countries such as Brazil, China, and Nigeria, including “financial support” to ministries and government offices.

More than just government officials and health bodies, exorbitant funding is also made available to universities and media institutions, documents show, to amplify the core messages and aims of CTFK.

The Smokescreen

Rather than advocating for general tobacco control measures, a good portion of CTFK’s campaigns has focused on banning or severely restrict harm reducing technologies such as vaping, especially in developing countries such as India, the Phillippines, China, Brazil, Peru, Uruguay, Uganda, Nigeria, Kenya, and more.

Diverting from their mission of truly “tobacco-free kids,” Bloomberg’s connected organizations have instead used their influence to zero in on innovative and novel technological vaping products that deliver aerosolized nicotine and have nothing to do with tobacco.

Instead, organizations like Campaign for Tobacco-Free Kids have used powerful rhetoric on the need to eliminate smoking as a literal smokescreen for eliminating or severely restricting all non-combustible nicotine alternatives, including vaping devices, heat-not-burn devices, nicotine pouches, and more.

Considering the demonstrated health potentials that come with endorsing nicotine-delivery alternatives as a means to quit smoking, as is recommended by relative health ministries in the United Kingdom and New Zealand, the hundreds of millions of dollars spent to undermine these efforts in developing countries with relatively high smoking rates should be a scandal of epic proportions.

But, alas, those headlines are far from prominent. Instead, we have multiple policy victories that restrict consumer choice and access to alternatives without much regard for actual public health.

Achieving True Public Health

What makes these revelations most startling is that there is no room for nuance on whether innovative new vaping devices and other alternatives, which do not contain tobacco, should be considered tobacco products. Organizations such as the Framework Convention on Tobacco Control, an organ of the World Health Organization, say they are no different.

But they’re wrong. The growing compendium of academic studies and government reports demonstrating that vaping is 95% less harmful than combustible tobacco speaks to that.

The fact that millions of people have been able to quit smoking by using nicotine vaping devices should be a testament enough to how the market can deliver solutions for public health, not to use a cudgel to hamstring and deny developing nations the real opportunity they have to improve and save the lives of millions of their citizens.

But as noted by Minton at the Competitive Enterprise Institute, “the strategy of CTFK and the wider Bloomberg-funded anti-tobacco effort appears aimed at winning policy battles and passing laws with little consideration of whether they result in actual reductions in smoking or improvements in health.”

If this is the face of the modern tobacco control movement, then we know that public health is not actually their goal.

Qui paiera les “ressources propres” de l’Union européenne?

Depuis que le plan de relance de l’Union européenne a été lancé par les institutions européennes à Bruxelles, tout le monde sait que les obligations de la dette commune que l’UE a contractée jusqu’en 2058 devront être remboursées d’une manière ou d’une autre. C’est d’autant plus vrai que maintenant que nous avons ouvert la boîte de Pandore d’une dette européenne, il y a fort à parier que ce ne sera pas la dernière fois que nous allons lever des fonds de cette manière. Selon l’accord effectué, les 750 milliards d’euros de prêts sont censés être payés par les ressources propres de l’UE, c’est-à-dire les impôts.

Le 1er janvier de cette année, la taxe sur le plastique de l’UE est entrée en vigueur. Cette taxe facture les États membres de l’UE pour leur consommation d’emballages plastique et exige qu’un montant proportionnel soit envoyé à Bruxelles pour le budget de l’UE. Il est également question d’une taxe d’ajustement aux frontières pour le carbone (des termes créatifs pour décrire une taxe sur le CO2), d’une taxe numérique et d’une taxe sur les transactions financières. Selon certains commentateurs, cela permettrait à l’Union de devenir plus indépendante des intérêts du Conseil européen, auquel la Commission se sent trop souvent redevable, alors que la plupart de ses soutiens “intégrationnistes” se trouvent au Parlement européen.

Mais qui va réellement payer ces taxes ? Une taxe numérique sur Microsoft, Amazon, Google, Apple ou Facebook sera-t-elle payée par ces grandes entreprises de l’autre côté de l’océan et ira-t-elle dans les poches du Berlaymont ? Pas du tout. L’UE propose de taxer les services numériques là où la transaction a lieu, et non dans le pays de résidence de l’entreprise. Dans le cas d’Apple, les ventes européennes sont organisées par le siège de la société à Dublin, en Irlande, afin de bénéficier du système fiscal irlandais plus avantageux. De la même manière, Amazon bénéficie de règles au Luxembourg. Google et Microsoft vendent davantage de services numériques, Google surtout à travers des services publicitaires. Ici, le coût de cette taxe serait, à l’instar de la TVA, supporté par les consommateurs finaux. Les partisans du libre-échange et opposants à ces taxes prouvent ici leur point :  le protectionnisme qu’implique ces taxes n’est pas payé par les entreprises étrangères mais bien par les consommateurs locaux. 

C’est également ce que provoque la taxe carbone sur les importations. Certains biens provenant de pays qui ne partagent pas les réglementations climatiques ambitieuses de l’UE seront bien plus compétitifs en raison des faibles coûts de production dans leurs pays. Si l’on tente d’écarter ces produits du marché au moyen d’une taxe sur le carbone, les consommateurs européens paieront simplement la facture .

Une taxe sur les transactions financières est un exemple encore plus flagrant de pensée fiscale erronée. Aux yeux de ses partisans, elle frappera les grands acteurs des marchés financiers internationaux, alors qu’elle ne sera payée que par les investisseurs particuliers et les petits actionnaires qui commençaient à apparaître récemment grâce à l’utilisation de plateformes de trading accessibles.  

Il faut comprendre une réalité économique malheureusement peu comprise : les entreprises ne paient pas d’impôts ou de taxes, ce sont toujours des personnes qui les paient. Une entreprise est toujours un nœud de contrats entre des personnes physiques. Cette entité fictive ne peut pas payer d’impôts ou de taxes : soit ce sont les propriétaires qui les paient (par une baisse de leur dividende), soit ce sont les consommateurs (par une hausse des prix des services ou une baisse de la qualité) soit ceux sont les employés (par une baisse de leurs salaires et conditions de travail). D’ailleurs, c’est bien souvent  cette dernière solution qui est privilégiée.

Les taxes européennes discutées actuellement sont censées créer une indépendance pour l’Union et taxer les grands acteurs financiers pour réduire les inégalités. En réalité, seul le premier objectif sera atteint. Devrions-nous s’en étonner ? 

Junk food ad bans don’t work

Recognised as a risk factor for severe COVID-19 cases, obesity will likely top the European policy agenda for the years to come.

The recent launch of the MEPs for Obesity and Health System Resilience intergroup combined with several surveys and events signals an increased interest in finding the most effective solution. However, the traceable tendency to use the WHO’s recommendations as a shortcut when it comes to lifestyle issues does more harm than good.

In November 2016, the WHO published a report calling on the European Member States to introduce restrictions on marketing of foods high in saturated fat, salt and/or free sugars to children, covering all media, including digital, to curb childhood obesity. 

Same year the “What about our kids?” campaign, led by Romanian MEP Daciana Octavia Sârbu and organised by 10 European health organisations, called for a change of the Audio-Visual Media Services Directive (AVMSD) to impose a watershed on junk food advertising at a time when the directive was undergoing a review. As a result, the updated directive did include a clause on the co-regulation and the fostering of self-regulation through codes of conduct regarding HFSS.

The WHO’s implicit impact is traceable across the board which, however, doesn’t add up to its legitimacy. The said report claims that there is unequivocal evidence that junk food ads impact children’s behaviour, but it doesn’t back it up with facts to show a causal link between the marketing of these foods and children’s obesity. What the report does though is demonise the marketing industry globally for intentionally targeting children.

The link between advertising – in particular TV ads – and childhood obesity is weak and most of the current conclusions are based on studies from decades ago. One such example is a trial conducted in Quebec over 40 years ago. As part of a 1982 study, five- to eight-year-old children who were staying at a low-income summer camp in Quebec underwent a two-week exposure to televised food and beverage messages. It was found that children who viewed candy commercials picked significantly more candy over fruit as snacks. Although there appears to be an established non-directional link between childhood obesity and television, and a plausible link with food ads, it is not sufficient to justify bans.

Junk food ad bans policies fail to recognise that childrens’ choices are heavily dependent on the environment where they grow up and behaviours that are treated as acceptable.  Therefore, if the parents live unhealthy lives then their children are much more likely to live unhealthy lives as well. 

To tackle obesity, we need to fundamentally change the societal narrative of what is healthy and what is not, and futile attempts to solve the problem through bans are not an effective way forward.

Education – both at school and home through model behaviours – and parental responsibility play a key role in fighting obesity. WHO’s junk food ad bans are a knee-jerk solution to a problem that requires a fundamental societal change.

Originally published here.

Shocking footage of police tasing a teenage boy for allegedly vaping in public has spurred outrage across the globe.

A group of Maryland officers was seen forcefully arresting the 18-year-old after claims he was asked to stop vaping on the Ocean City boardwalk.

Eyewitnesses say police instructed the teen, Taizier Griffin, to remove his backpack and lay down on the ground, but tased and hog-tied him when he reached for his bag.

Griffin was reportedly charged with resisting arrest and second-degree assault, however, viral footage of the event showed that he appeared to be complying with police instructions at the time.

Twitter user Rob Wiscount said:

“Besides the obvious police brutality on display here, it is also an astounding display of misappropriation of police resources.

“Ocean City used six officers and 50,000 volts…to stop one 18-year-old…from VAPING!

“If he had a skateboard, they’d have called SWAT?”

Rapper Ice T also commented on the incident, tweeting: “Cops tased this kid for Vaping??? RealIy…! At least they didn’t kill him I guess…smh…. wow.”

Astonishingly, the same thing happened just six days later, with a group of four teens being arrested after allegedly ignoring the ban on vaping.

One of the boys involved claims he was tased, whilst another was pinned down and repeatedly kneed in the side by an officer.

Ocean City officials said that ‘officers are permitted to use force, per their training, to overcome exhibited resistance,’ but many are questioning why the police took such aggressive steps to enforce the boardwalk’s vaping regulations.

Twitter user Jukka Kelovuori also weighed in, saying: “Getting arrested over vaping is probably way riskier than a lifetime of vaping in itself.”

Officials confirmed that both arrests will be investigated, explaining that they are aware of public concerns about the incidents.

They said: “While the use of force is never the intended outcome, our police department’s first priority is to protect and serve.”

Vaping advocates have raised concerns that widespread bans and strict regulations could lead to more arrests like this.

Yaël Ossowski of the Consumer Choice Center said:

“The MORE you ban and demonize ordinary consumer products, the MORE police interactions you condone.

“We don’t need more situations like this…Let People Live.”

The consumer group Rights4Vapers also tweeted: “We cannot let vapers be criminalized.

“Vaping is not a crime.”

Originally published here.

Stop the bailouts

The rulings on KLM, TAP, and Condor should be just the beginning

The airline RyanAir has successfully challenged the bailouts of the Dutch airline KLM, the Portuguese company TAP, and the German carrier Condor. The crusade of RyanAir CEO Michael O’Leary seems to show effects, as the €550 million bailout for Condor has been put on hold – despite the court not asking the money back immediately from the airline – while others are hanging in the balance.

TAP and KLM have seen the same things happen to them. In all three cases thus far, the justification of the European Court of Justice has been that the bailout funds hadn’t been sufficiently justified by the member states in question. Ryanair welcomed the two rulings as an “important victory for consumers and competition”. The state aid had violated the principle of the internal market in the EU and reversed the liberalisation of air transport. They led to unfair competition by inefficient companies. Europe’s largest low-cost airline has filed a total of 16 lawsuits against state aid to competitors with the Luxembourg court, including the billions in aid to Lufthansa. However, the EU court had rejected lawsuits against state funds for the Scandinavian SAS, Finnair and Air France. The Irish company had taken legal action in May 2020 to denounce on the one hand guaranteed loans granted by Sweden, in particular to the Scandinavian company SAS for an amount of 3.3 billion crowns (308 million euros).

In the case of France, as in the case of Sweden, it considers that the aid measures are indeed aimed at remedying the damage caused by this extraordinary event to airlines in both countries. The State aid is also considered to be “proportionate”.

One point where the ECJ judges in the Condor case see a need for clarification is the question of the costs for the insolvency proceedings. This had to be extended after the cancellation of the PGL (Polish Aviation Group). The EU Commission had not sufficiently explained why it had included the extended insolvency period when calculating the damage to Condor from the Corona crisis, the judges explained. In principle, the Commission itself has stipulated that only damages directly caused by the pandemic – such as cancelled flights – may be compensated with taxpayers’ money. Moreover, it had not been explained why the planned sale to PGL had failed because of the pandemic. On this point, improvements could solve the headaches of Condor, but it’s not a given.

The problem with only attacking the precise justifications is that while the ECJ temporarily suspends the bailouts, the court does not strike down the principle of airline bailouts at all. Most of these airlines demanded funds in just a few weeks after the lockdown measures began, showing that they were all short-stripped for cash to begin with. Why should taxpayers fund companies that do not secure themselves sufficiently for times of crisis? After all, individual citizens or small companies would also be asked to pay their bills – and if caught spending money they do not have, would be called fiscally irresponsible. How airlines balance (or rather not balance) their books is their business alone, and not that of the taxpayer.

Originally published here.

Illicit trade is booming: what can be done

The Irish Revenue recently released their annual report for 2020.

According to the findings, there has been a 250% increase in illegal cigarettes seized since 2019. The sharp increase represents an urgent need for the Irish government to reconsider its approach towards fighting illicit trade. Contrary to popular opinion, taxes are not effective in achieving that.

Illicit trade is a consequence of restrictive policies that create valuable incentives for criminals to provide consumers with a cheaper — and less safe — alternative. Irish fiscal policies aimed at cutting down the demand for cigarettes, for example, such as a 50 cent increase of the excise duty on a pack of cigarettes, plays to the benefit of smugglers seeking quick profits. 

Smugglers exploit a regulatory disparity within Europe, in particular that concerns countries that are in close territorial proximity to the EU. In Minsk the price of a pack is around 1.40 EUR, 10 times cheaper than in Ireland. In 2020 alone, Latvian authorities confiscated 21 million illegal cigarettes from Belarus through a single border entry. It is important to keep in mind the numbers include only the detected cases, and, in reality, the scope of criminal undertakings is much greater. 

The same applies to products across the board, such as drugs. In February, in Cork, the Revenue made one of the largest seizures of cocaine valued at 12.04 million EUR. These are illicit products that can threaten consumer well-being. Some 20 per cent of Irish teenagers have consumed illegal drugs at some point in their lives, and the only way to obtain these is through the black market, where no regulations or age-restrictions apply.

Black markets exist not only because there are groups willing to take the risk of smuggling products across borders, but also because there is a demand for overregulated products. A survey conducted by iReach for the Forest Ireland in October 2020 found that 70% of adults (including 67% of non-smokers) in Ireland agree that it is “understandable” that consumers might choose not to buy cigarettes and tobacco from legitimate retailers in Ireland. 

Ireland as a tobacco high-cost country is, therefore, especially vulnerable to criminal activities, and while detection efforts should be extended, decisive steps in the form of tax cuts or commitment to abstain from further tax increases should be taken. 

A 2010 study on the impact of cigarette tax reduction on consumption behaviour in Canada published by CIRANO (Centre interuniversitaire de recherche en analyse des organisations) in Montreal found that each additional dollar in final applicable taxes raises the incentive to resort to consuming contraband cigarettes by 5.1 per cent, while each additional dollar in tax cuts decreased it by 5.9%. Therefore, higher taxes increase the attractiveness of the black market, and the deeper the tax cuts, the higher the likelihood of stopping smuggling.

While it is true that the cigarette prevalence in Ireland has been consistently dropping, it doesn’t mean that if the government cut taxes the rates would shoot back up. Canada provides a valuable example. In 1994, the Canadian government slashed taxes on cigarettes to tackle the booming illicit trade. Despite alarmist expectations, the smoking prevalence dropped, and the trend has persisted. Compared to pre-tax cuts times, illicit trade has also significantly decreased.

The Irish Heart Foundation’s recommendation to annually increase the price of cigarettes so that the overall cost of a pack reaches €20 by 2025 doesn’t stand up to scrutiny, and will only lead to further spikes in illegal trade in Ireland. 

In order to succeed, the Irish government should escalate detection efforts to target the supply side of the illicit market, and consider significant tax cuts, or, at least, disregard calls for more increases of tobacco excise taxes.

Originally published here.

Bahaya Pelarangan Vape di Negara Berkembang

Dunia saat ini masih terus berperang melawan pandemi COVID-19 yang muncul pada akhir tahun 2019 lalu. Sudah satu setengah tahun lamanya, virus yang sangat mudah menyebar antar manusia ini telah meluluh-lantahkan berbagai kegiatan, seperti acara musik dan perhelatan olahraga, serta keseharian miliaran orang di berbagai tempat di dunia.

Salah satu dampak yang paling terlihat dari munculnya pandemi ini adalah semakin banyaknya orang-orang yang sadar akan pentingnya kesehatan dan kebersihan. Semakin banyak dari kita yang menyadari bahwa mencuci tangan atau membersihkan badan setelah keluar rumah adalah sesuatu yang sangat penting untuk dilakukan agar terhindar dari segala macam penyakit, khususnya COVID-19.

Tidak hanya dari masyarakat, banyak pemerintahan di berbagai belahan dunia juga mulai mengkampanyekan gaya hidup sehat untuk mencegah penyebaran virus tersebut. Beberapa diantaranya yang kita kenal di Indonesia adalah gerakan 5M, yakni Memakai masker, mencuci tangan pakai sabun dan air mengalir, menjaga jarak, menjauhi kerumunan, serta membatasi mobilisasi dan interaksi (kesehatan.kontan.co.id, 26/1/2021).

Namun, berbagai upaya memperbaki kesehatan publik yang diadvokasikan oleh sebagian pihak guna mencegah penyebaran COVID-19 juga tidak hanya melalui kampanye, tetapi juga melalui pelarangan berbagai produk yang dianggap membahayakan kesehatan. Salah satunya produk yang kerap menjadi sasaran adalah produk-produk tembakau seperti rokok.

Salah satu negara yang memberlakukan pelarangan tersebut adalah Afrika Selatan. Pada tahun 2020 lalu misalnya, Afrika Selatan melarang pembelian produk-produk tembakau seperti rokok (bbc.com, 17/5/2020).

Akan tetapi, tidak hanya produk-produk rokok konvensional yang dibakar saja yang diadvokasi oleh beberapa pihak untuk dilarang. Salah satu produk lain yang diadvokasi oleh sebagian pihak untuk dilarang adalah produk-produk rokok elektronik, atau yang dikenal dengan nama vape, karena dianggap juga membahayakan kesehatan.

Salah satu pengusaha dan filantropi yang mengadvokasi kebijakan tersebut adalah pengusaha besar asal Amerika Serikat, Michael Bloomberg. Bloomberg telah meluncurkan inisiatif global untuk pengendalian tembakau sebesar USD1 miliar, atau sekitar 14 triliun rupiah.

Dampak dari inisiatif global yang dilancarkan oleh Bloomberg ini sudah muncul di berbagai negara, khususnya di negara-negara berkembang. Di Filipina misalnya, lembaga regulator kesehatan mulai mempresentasikan berbagai dokumen kebijakan tidak hanya melarang rokok, namun juga vape, di negara tersebutm setelah mendapatkan dana dari inisiatif global Bloomberg (brusselstimes.com, 18/3/2021).

Tidak hanya di Filipina, Meksiko juga mengalami kejadian yang serupa. Di Meksiko belum lama ini, terungkap bahwa salah satu staf pengacara dari lembaga advokasi kesehatan yang didanai oleh Bloomberg, yang bernama Campaign for Tobacco-Free Kids, telah menyusun undang-undang yang bertujuan untuk melarang impor dan penjualan produk-produk vape (brusselstimes.com, 18/3/2021).

Kebijakan ini tentunya merupakan sesuatu yang sangat memprihatinkan, khususnya di negara-negara berkembang. Pelarangan terhadap produk-produk vape atau rokok elektronik berarti akan semakin banyak orang yang beralih ke produk-produk rokok konvensional yang dibakar, atau produk-produk vape ilegal yang sangat berbahaya hingga dapat menimbulkan kematian.

Hal ini akan semakin berbahaya bila terjadi di negara-negara berkembang, apalagi pada masa pandemi, karena secara umum negara-negara tersebut tidak memiliki fasilitas layanan kesehatan yang baik. Bila produk-produk vape dilarang, terlebih lagi pada masa pendemi, maka akan semakin banyak orang yang beralih ke rokok konvensional yang dibakar, yang secara ilmiah sudah terbukti menyebabkan berbagai penyakit kronis seperti kanker dan penyakit jantung.

Vape atau rokok elektronik sudah terbukti merupakan produk yang jauh lebih aman bila dibandingkan dengan rokok konvensional yang dibakar. Pada tahun 2015 lalu, lembaga kesehatan Britania Raya, Public Health England (PHE), mengeluarkan laporan bahwa vape atau rokok elektronik merupakan produk yang 95% jauh lebih aman bila dibandingkan dengan rokok konvensional yang dibakar (Public Health England, 2015).

Oleh karena itu, kebijakan untuk memperbaiki kesehatan publik dengan cara melarang produk-produk vape atau rokok elektronik adalah kebijakan yang tidak tepat. Untuk memperbaiki kesehatan publik dari dampak negatif dari rokok konvensional, akan lebih efektif bila dengan membeirkan opsi produk lain yang lebih aman kepada para perokok.

Hal ini sudah terbukti di negara-negara di mana pemerintahnya bukan melarang produk-produk vape, namun justru mendorong para perokok untuk beralih ke produk-produk rokok elektronik yang jauh lebih aman. Di negara-negara tersebut, jumlah perokok justru menjadi berkurang. Di Selandia Baru misalnya, berdasarkan survei tahun 2018, ada 13,2% perokok. Jumlah tersebut berkurang dari tahun 2013 ketika angka perokok sejumlah 15,1% (stats.govt.nz, 10/10/2019).

Sebagai penutup, bila kita ingin membantu para perokok, khususnya di negara-negara berkembang yang jumlahnya sangat besar, maka kita harus mampu menyediakan produk alternatif yang dapat digunakan oleh para perkok untuk menghentikan kebiasaannya. Jangan sampai, intensi baik kita untuk memperbaiki kesehatan publik justru semakin menghasilkan sesuatu yang lebih buruk.

Originally published here.

The EU should drop the Digital Services Tax

European consumers risk paying more

With the rise of the digital economy, a trend towards increased regulation of digital services has come to the fore. Digital services tax (DST), under which multinational enterprises are taxed in countries where they provide services through a digital marketplace, has become one of the most popular means to tame the big players.

In 2018, the European Commission initiated the introduction of a 3 per cent DST on the revenues generated in the EU digital market, including online sales and advertising. However, with the opposition of countries such as Sweden or Ireland, no agreement at the Council level has ever been reached. Despite the lack of compromise, member states went on to introduce DSTs on national levels. As a result, Austria, Belgium, Czech Republic, France, Hungary, Italy, Poland, Slovenia, Spain have proposed, announced or are already implementing some sort of digital tax. 

According to a KPMG report, the said tax is generating 2 to 3 percent of the countries’ government revenues from a narrow group of large Internet companies. Although rates slightly differ between the member states – 7.5 percent in Hungary and 3 percent in France – the target is generally the same: large multinational companies.

Under current international tax rules, a country where multinational service companies are subject to corporate income tax is generally determined by the place where  production occurs rather than where consumers or users are. However, the proponents of DST argue that digital businesses get income by selling to users abroad through the digital economy but do so without physical presence there and conversely they are not subject to corporate income tax there.

The Organisation for Economic Co-operation and Development (OECD) has called on more than 130 countries to amend the international taxation system. This current proposal would require multinational businesses to pay some of their income taxes where their consumers or users are. According to the OECD, the dilemma could be unlocked this year, and great hopes are put into the Biden administration to help make that happen.

DSTs distort the market

While Austria and Hungary are taxing just advertising, in France, Turkey, and Italy, the tax scope is much broader. It includes revenues from providing a digital interface, targeted advertising, and data transmission about users for advertising purposes. Ultimately these taxes and the additional costs companies will have to be borne by consumers. Higher costs for advertising are likely to result in higher prices for these companies’ products and services. According to a 2019 study on the economic impact of the French Digital Service Tax “approximately 55 percent of the total tax burden will be borne by consumers, 40 percent by businesses that use digital platforms, and only 5 percent by the large internet companies targeted.”

Turkey and Austria provide a valuable insight into how these taxes work.

According to the report mentioned above, in Turkey, in September 2020, an additional 7.5 percent fee was added to the costs of in-app subscriptions and other types of payment made on the digital platforms. In Austria, 5 percent of DST has been added to developers and advertisers’ invoices when promoted as part of the Austrian DST. 

These additional costs are paid by consumers and small developers and do nothing to address the evolving nature of the digital market. In economic terms, DSTs increase the deadweight loss.

At first glance, it seems unfair that big multinationals don’t pay taxes while traditional businesses are overwhelmed by taxation and regulation. The EU Commission found that within the EU, digital companies had to pay 9.5 percent in tax on average while traditional business models were subject to a 23 percent  average effective tax rate. However, if the goal is to enhance economic well-being, a better solution would be to drive down taxes for both types of businesses. 

Digital platforms are creating innovation and wealth within the economy. The “app economy” has created millions of jobs in the last few years, with 800,000 jobs in Europe and the United States in 2017 alone.

On the opposite of the current political belief, the digital service tax won’t affect big multinationals, but small developers will have to increase their price. European innovation will suffer too. If the prices of scaling up go up, small developers and innovators won’t be able to effectively compete with the US companies.

Digital platforms and services have helped millions of people working from home during the recent COVID-19 pandemic and generally have revolutionised the global economy. It is exactly because digital platforms are different from the supply chain that had been prevalent for hundreds of years, that there is a temptation to overregulate them, otherwise to put brakes on them in order to limit risks stemming from the lack of knowledge. 

Every tax, including a revenue tax, is more preoccupied with collecting profits rather than enhancing innovation. When talking about DSTs, it is key to understand what goal we are pursuing. If we want the European Union to become an innovation hub, then the DST definitely isn’t the way forward but if we want to punish big tech companies valued by European consumers for their success, then it is exactly what we need. 

And yet, even if we were to go down that road and continue to stand by the DST, we should do so by encouraging tax competition within the EU instead of imposing even more tax centralisation. Competition would allow EU member states to compete between themselves as regulatory regimes. In a similar fashion, that would provide digital services and platforms with more choice.

Digital economy boosts economic well-being. Some apps, such as Shazam, which recognizes the song played in that moment, or Slack, a service that provides instant messages for companies and teams, have been created by young entrepreneurs. Since then, they have exponentially expanded, becoming part of our daily life. 

In order to increase competitions in the digital market the EU should look to push more to smartly regulate the digital platform not to tax them. Such regulation would include clear rules of conduct defining blacklisted practices (e.g.i.e. self-preferencing) in order to self regulate certain aspects of a digital platform conduct, including transparency towards users, reporting obligations and prohibitions. 

Such an approach would safeguard the competition so that SMEs are able to compete with big players and create the dynamic market that benefits all consumers.

If, on the other side, European countries continue to push to introduce and increase DSTs without any agreement at the global level, European consumers risk paying more than their North American or South Asian counterparts and lose innovation and choice. DSTs are ineffective, and the EU should walk away from it once and for all.

Originally published here.

How Can We Ensure Consumer Privacy?

Each and every week, we hear of new data breaches, hacks, and disclosures of sensitive financial and personal information.

Last month, it was the cyberattack on the Colonial Pipeline in the United States, causing spikes in gas prices and long lines at the pump. Before that, news broke of a data leak affecting half a billion Facebook accounts, a bot that has successfully scraped 500 million LinkedIn accounts, and a hack at Stanford University that exposed thousands of social security numbers and financial details. The cycle is endless.

The sheer number of reports of data leaks, hacks, and scams on affected accounts has now grown so gargantuan that consumers and users are left numb. The more that number grows, the more we grow numb.

But breaches of private data matter. And consumers should be rightly ticked off.

Because for every company screw-up, hacker exploit, and insecure government database, there are thousands of firms and organizations doing it right, keeping users’ data secure, encrypted, and away from prying eyes.

And while individual countries in the European Union have their own privacy and data laws, the more troublesome aspect here is the troubled General Data Protection Regulation (GDPR), which all too often makes it more difficult for legitimate businesses to secure data, not less.

While we should always be vigilant about potentials for leaks and hacks, a chief concern of a smart and common-sense data privacy law or directive should be in championing innovation, which isn’t the case at present.

For every new health data company, logistics firm, or consumer wearable, proper data collection and retention are a core value. The more that rules are uniform, clear, and do not create barriers to entry, the more innovation we will see when it comes to data protection.

We should incentivize firms to adopt interoperability and open data standards to ensure data is portable and easy to access for users. Major social media networks now allow this prevision, and it has been the standard for website data for several years.

If that becomes the standard, consumers will be able to choose the brands and services that best cater to their needs and interests, rather than just companies left standing in the wake of overregulation.

At the same time, if we are to have revised privacy rules in the EU, we should enshrine the principle of technology neutrality, where government avoids decreeing winners and losers. That means that regulating or endorsing various formats of data, algorithms, or technology should be determined by firms and consumers, not government agencies without the knowledge necessary to make good decisions. The EU’s recent attempt to designate the “common phone charger” as the micro-USB connection, at a time when USB-C connections are becoming the industry standard, is an easy example.

This also extends to innovation practices such as targeted advertising, geo-targeting, or personalization, which are key to the consumer experience.

Added to that, we should be wary of all attempts to outlaw encryption for both commercial and personal use.

Pressure has mounted on the European Commission to overhaul encryption by private actors, but that would be a mistake.

The reason encryption remains a powerful tool in the arsenal of companies and agencies that handle our data and communications is because it works. We must defend it at any cost.

While there is plenty to be concerned about when it comes to online breaches and hacks, consumers should be able to benefit from an innovative marketplace of products and services, unencumbered by regulations that all too often restrict progress.

This balance is possible and necessary, both if we want to have a more secure online experience, and if we want to continue to have the best technology at our disposal to improve our lives.

Originally published here.

Regulate vaping to keep youth vaping incidences to a minimum, says consumer advocacy group

Regulating vaping can help keep youth vaping incidences to a minimum, said a UK-based consumer advocacy group.

In a statement today, the London-based Consumer Choice Center (CCC) said that in the UK, where vape is regulated, youth vaping incidences have been minimised.

It cited a report in 2021 by Action on Smoking and Health, which examined the use of e-cigarettes or vape among youths in Great Britain, that found that a large majority of 11 to 18-year-olds have never tried or are unaware of e-cigarettes (83%). This finding has remained consistent since 2017.

It said the survey further found that vaping is much less common among youths who have never smoked. A large majority of “never smokers” aged 11-18 years, 94.1% in total, have either never vaped (87.9%) or are not aware of them (6.2%).

In its recent policy note entitled “Age Restrictions of Vape Products”, CCC recommended the following:
• Introduce smart regulations and enforce strict age restrictions on vaping devices and liquids at the points of sale
• Use modern age verification technology for online sales
• Learn from other industries such as alcohol and fireworks on how to improve compliance rates
• Retail and industry should be encouraged to be more proactive with the enforcement of rules
• Do not punish legal adult vapers for the lack of enforcement of age restrictions

CCC managing director Fred Roeder said that instead of taking drastic measures such as banning vape, which will only drive more consumers to illegal products on the unregulated black market, a more coordinated approach by both regulators and industry can and should be explored.

“We believe that the regulations with strict enforcement on no-sale to the underage marks the distinction between consenting adult consumers and those who have not reached the legal age to make these decisions,” he said.

He also cited examples from the UK on how controls are put in place to stop the underage from purchasing products with age restrictions.

An example of such a solution is AgeChecked, a UK-based secured online age verification system that requests a buyer’s full name, billing address, and date of birth when placing an order.

This information must be entered as it will appear on the buyer’s driver’s license, electoral roll, or be used for a UK credit card, he said.

Originally published here.

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