Ethiopia increases tobacco taxes by introducing specific excise

March 16, 2020

Par: communication@cnct.fr

Dernière mise à jour: March 16, 2020

Temps de lecture: 3 minutes

L’Ethiopie augmente ses taxes sur le tabac en introduisant une accise spécifique
In February 2020, Ethiopia passed a landmark bill increasing taxes on tobacco products. The tax reform followed last year’s comprehensive tobacco control law, which included a ban on smoking in public and communal places, a ban on advertising, broad graphic warnings on tobacco packaging, new restrictions on the sale of tobacco products to minors (those under 21) and e-cigarettes. With this tax reform, the 75% tax on domestic production costs (or cost, insurance and freight) for imported cigarettes is now a tax on the pack of cigarettes, It becomes the ad valorem part of the excise duty paid on the purchase of the product, this ad valorem part represents 30 %, And to this tax is added a specific excise duty that has just been created and which represents 8 Ethiopian birrs (ETB) (approximately 0.25 USD). It is estimated that the new tax will not only bring an additional 925 million ETB (28.7 million USD) to the State, but will also, through its impact on the price of cigarettes, reduce the smoking rate among adults by 10%. Furthermore, the new tobacco tax regime is expected to reduce the significant price gap between cheap and premium cigarettes, mitigating the consumption shift effect and thus reinforcing the positive health effects of taxes. The legislation is expected to increase the tax share of the average retail price of cigarettes to around 54%, which is still far from the WHO recommended minimum of 75%. Higher rates would not only help Ethiopia meet WHO standards, but would also contribute to further reducing tobacco use. Nevertheless, the new tax represents a huge victory for public health in Ethiopia and a hope for many low- and middle-income countries facing increasingly affordable tobacco products. The introduction of the bill has been widely supported by the World Health Organization, the World Bank, and many nongovernmental organizations working in Ethiopia and internationally. ©Tobacco Free Generation
| ©National Committee Against Smoking |

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