Uruguay: University study analyzes the effects on consumption of an increase in tobacco taxes for the country

In Montevideo, a study conducted by the Universidad de la República (Udelar) predicts a 60% increase in taxes between 2025 and 2028, if these reach 75 % of the retail price of a pack of cigarettes, would reduce smoking by 18.65 %, prevent around 49,000 people from starting to smoke and increase tax revenue by 24.35 %, in line with WHO recommendations[1]Smoking is responsible for 15.1% of adult deaths in Uruguay, accounts for 16.7% of health care costs, and causes the premature death of 50.1% of smokers. According to the study, a tax increase would improve health outcomes while increasing government revenue, strengthening Uruguay's position as a leading country in the fight against tobacco.

Tobacco tax hike to improve public health and finances in Uruguay

This research, led by Patricia Triunfo and Zuleika Ferre, from the Department of Economics at the Faculty of Social Sciences of the Universidad de la República, is based on the analysis of data covering the period from 1997 to 2022. It confirms that anti-smoking policies implemented since 2010 have led to a significant reduction in tobacco consumption in Uruguay. The estimated price elasticity of -0.47 shows that price increases have a significant effect on reducing demand, with a 10 % increase in the selling price of a pack of cigarettes reducing demand for cigarettes by 4.7 %.

Currently, Triunfo and Ferre are working on a new study using data from the National Institute of Statistics (INE) to assess consumption differences according to socioeconomic levels. Reducing consumption does not reduce tax revenues ", Ferre specified. On the contrary, despite this drop in sales estimated at 18.65 %, the report indicates that, " From a tax point of view, Imesi revenues (specific consumption tax in Uruguay) would increase by 28.93 % and total tax revenues would increase by 24.35 % " Indeed, an increase in tobacco taxes would reduce health costs while funding public health systems.

Methodological challenges and limitations of research funding

To conduct this study, the researchers used aggregated data on legal cigarette sales, incorporating variables such as prices, income and regulatory measures.[2].

This work was conducted in collaboration with Jeffrey Harris of the Massachusetts Institute of Technology (MIT), and received funding from the Bloomberg Foundation. In 2012, a publication appeared in The Lancet had already analyzed the comparative situation of Uruguay and Argentina, showing that the Uruguayan measures had allowed a reduction " substantial and unprecedented » consumption, unlike Argentina which only adopted comprehensive policies in 2011.

The same researchers, however, highlight the challenges associated with evaluating public policies. Evaluating public policy is difficult, particularly because they are often implemented simultaneously and jointly. “, explained Patricia Triunfo.

Furthermore, they point to the lack of investment in scientific research, despite a pro-science narrative. Triunfo explains that investment in research remains at a standstill, limiting the ability to produce useful evidence for public policy.

Other avenues to accelerate the fight against tobacco in Uruguay

The study shows that price is an effective lever for reducing consumption, but it must be integrated into a comprehensive policy. This includes combating smuggling, regulating new products such as e-cigarettes and heated tobacco devices, and implementing harmonized taxation to prevent product substitution. Particular attention must also be paid to risk perception, particularly among young people, who are exposed to misleading messages from the industry.

The researchers also call for strengthening fiscal measures with better-funded and more accessible smoking cessation policies, particularly for women. They also advocate for greater transparency in political decisions, balancing public health and economic interests. Finally, they point out that only independent and well-supported research can guarantee fair policies, in the face of a powerful industry that is particularly keen to improve its image. Last year, British American Tobacco, for example, carried out a greenwashing operation in Uruguay. by purchasing a eucalyptus farm there, with disregard for the local ecosystem, in order to purchase carbon credits to offset the 130,000 tonnes of greenhouse gas emissions linked to the manufacture and distribution of its Vuse brand of electronic cigarettes.

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[1]MercoPress, Uruguayan university study favors taxation on cigarettes, published on April 28, 2025, accessed on April 29, 2025

[2]Lagos Leo, Impuestos a los cigarrillos: si increaseran de acuerdo a lo que recomienda la WHO, para 2028 Uruguay tendría 49,000 smokeadores menos, La Diaria Ciencia, published on April 26, 2025, consulted on April 29, 2025

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