The importance of effective tax policy to reduce tobacco consumption

December 27, 2019

Par: webstudio_editor

Dernière mise à jour: December 27, 2019

Temps de lecture: 4 minutes

The studies[1]-[2] are indisputable: an effective tax policy through significant and repeated increases in tobacco taxes reduces consumption. In fact, it is the most effective method for reducing smoking. Increasing prices through taxes induces a decrease in consumption and cessation among smokers and discourages the start of smoking. These effects apply more to young people, to lower socioeconomic groups and to certain ethnic groups[3]-[4].

Studies highlight that the impact of tax policy is even greater in lower-income countries.[5]On average, the World Bank estimates that an increase in the real price of cigarettes of 10% reduces youth smoking rates by 6.5% or more, and smoking among young adults (18-25 years) by about 3.25%, smoking among other adults by 2%, and total consumption by an average of 4%.

For these increases to be fully effective, taxes on all tobacco products should be increased to avoid consumption shifts, for example from cigarettes to rolling tobacco, small cigars, shisha, etc.

These tax increases must be substantial, otherwise they correspond to an increase in the profit margins of manufacturers, tobacconists and taxes without allowing a drop in consumption. They must also take into account changes in prices and incomes.

Tax increases can lead to an increase in cross-border purchases in the event of a significant price differential; however, this increase does not call into question the effectiveness of tax increases as a whole, including for border areas, even if the effect is more limited there.

The tobacco industry and tobacconists talk about the development of smuggling in the event of tax increases. In reality, smuggling is mainly the result of a lack of control over the supply chain of manufacturers' products, with smuggled cigarettes leaving their factories. The countries in Europe where prices are the highest are among the countries least affected by tobacco smuggling. Conversely, countries where taxes are among the lowest are faced with smuggling problems.[6][7].

Thus, tax increases allow a reduction in consumption, while increasing tax revenues and a country's income, in particular for the care of sick smokers and to be able to finance the fight against smoking.

Article 6 of the FCTC and its implementing guidelines address tobacco product tax policies and their implementation modalities. [1] Chaloupka FJ, Straif K, Leon ME. Effectiveness of tax and price policies in tobacco control. Tobacco Control, 2011; 20(3): 235-238. [2] https://www.tobaccofreekids.org/assets/factsheets/0146.pdf [3] Siahpush M, Wakefield MA, Spittal MJ, Durkin SJ, Scollo MM. Taxation reduces social disparities in adult smoking prevalence. Am J Prev Med. 2009; 36(4): 285-291. [4] Levy DT, Mumford EA, Compton C. Tobacco control policies and smoking in a population of low educated women, 1992-2002. J Epidemiol Community Health. 2006; 60(Suppl 2): 20-26. [5] Ho, Li-Ming et al. “Raising cigarette excise tax to reduce consumption in low-and middle-income countries of the Asia-Pacific region: a simulation of the anticipated health and taxation revenues impacts.” BMC public health vol. 18.1 1187. 19 Oct. 2018, doi:10.1186/s12889-018-6096-z [6] Smith KE, Savell E, Gilmore AB What is known about tobacco industry efforts to influence tobacco tax? A systematic review of empirical studies Tobacco Control 2013;22:e1.

[7] Skafida V, Silver KE, Rechel BPD, et al Change in tobacco excise policy in Bulgaria: the role of tobacco industry lobbying and smuggling Tobacco Control 2014;23:e75-e84.