Evaluation of tax policies in the world: first results

Researchers at the Institute for Health Research and Policy at the University of Illinois at Chicago launched the first edition on December 15 of the International Cigarette Tax Scorecard during the 18th World Conference on Tobacco or Health webinar. This evaluation grid[1] analyzes the performance of cigarette tax policies in 174 countries.

Using data from the World Health Organization, the assessment grid is based on four criteria: the absolute price of cigarettes, adjusted for purchasing power parity (PPP) to compare prices across countries), changes in the affordability of cigarettes over time, the share of taxes in retail prices, and the type of taxes. Each country is given a score out of 5, with the total score reflecting an average of the scores for the four components (5 being the best score).

Significant disparities between countries

Only four countries scored 4 or higher, Australia and New Zealand, with scores of 4.63, followed by Ecuador and the United Kingdom, with scores of 4.38. Australia and New Zealand, with their high² specific, uniform and regularly increasing excise taxes, have significantly reduced the affordability of cigarettes. A pack of cigarettes in Australia cost an average of 14.47 PPP $ in 2018, and 16.08 PPP $ in New Zealand. The countries where cigarette tax policies have improved the most since 2014 are Bahrain (+3 points), Saudi Arabia (+2.75), the United Arab Emirates (+2.75), Kyrgyzstan (+2.50) and the Philippines (+2.50). These improvements reflect the introduction of high excise duties on cigarettes and the simplification of the tax mechanism applicable to cigarettes. France ranks 13^e ranks, tied with Bosnia and Herzegovina, Greece, Norway and Serbia in Europe with a score of 3.63.

Iraq, Libya and Afghanistan have the lowest scores (between 0 and 0.25). These countries have no tax policy for tobacco products, which results in very cheap cigarettes. The global average score increased from 1.85 in 2014 to 2.07 in 2018. This relative progression hides disparities in situations: the overall scores improved in 89 countries but deteriorated for 43 countries.

Uneven efforts across countries in the European region

The European region ranks first in terms of cigarette tax policy. However, with a score of 2.79, Europe is only slightly above average. This situation is not the same reality here either. Thus, the 2001 European Union Directive on the taxation of tobacco products, which applied in 2018 to the 28 members of the European Union (including the United Kingdom) did not have the same consequences depending on the countries concerned. The taxation of tobacco products falls under the competence of the Member States, but the existence of this directive has helped to pull up countries where prices were particularly low, in particular the last countries to join the European Union (Bulgaria, Poland, etc.). For the others, this directive has had relatively few consequences and the question now arises of its revision to make it more appropriate.

Effective tax policies undermined by tobacco industry

Despite considerable evidence supporting tobacco tax increases and guidance from international organizations, some policymakers, particularly in low- and middle-income countries, have been slow to adopt these policies. These delays are largely the result of strong opposition from the tobacco industry and its allies. They claim that tax increases lead to increased illicit trade and job losses and are regressive. These claims are greatly exaggerated.[2] or even inaccurate[3]. However, these oppositions have slowed or blocked the implementation of effective tax policies to reduce tobacco consumption. Significant tax increases discourage young people from starting to smoke and encourage current smokers to reduce or stop their consumption. detailed instructions on best practices in tobacco taxation have been developed by the WHO Framework Convention but also by the World Bank.