Tobacco Tax
Tobacco products are responsible for causing millions of preventable deaths each year. While there are several many ways to deter tobacco use, the most powerful and cost-effective way to decrease its use is by implementing tobacco control policies. Such policies, such as increased taxation, has been shown to reduce tobacco-related deaths and disease, prevent initiation of new smokers and decrease overall tobacco use. Tobacco taxes also increase government revenue, decrease the societal costs of tobacco (medical intervention and lost productivity) and allow individuals and families to reduce their expenses when quitting.

Organizations, such as the World Bank Group (WBG), WHO, Bloomberg Philanthropies, and the Bill & Melinda Gates Foundation, have been dedicated in expanding tobacco taxation work globally. The coordination of these organizations work to assist countries to most effectively control the spread of tobacco use.

Evidence shows that price increases on cigarettes are effective in reducing demand. Countries of all income levels have seen higher tobacco prices both decrease and prevent initiation of tobacco use. Compared to adults, children and adolescents are more sensitive to price increases, allowing for a significant impact in juvenile smoking.

The WHO is committed to helping governments design intelligent tobacco tax policy, and created an economics team to develop the WHO Tobacco Tax Simulation Model, TaXSiM. This model helps countries analyze tax policies, impacting assessment and decision-making.

Bull World Health Organ published data from 181 countries to quantify the impact of raising cigarette tax by one international dollar (I$) per pack. If implemented, daily smoking would decrease by 9 percent, resulting in 66 million fewer smokers and 15 million fewer smoke related deaths.

Countries that reinvested revenues from tobacco tax increases in health programs would also experience a greater impact on public health. Additionally, if revenues from tax increases were allocated to health budgets, expenditure on health would increase by 4 percent globally.

Tobacco use is a huge expense to society, and kills up to half of its users. Tobacco taxation, an important evidence-based intervention, helps countries achieve development objectives by increasing revenue, decreasing tobacco-related expenses and saving lives. Creating finance development while reducing tobacco use is a win-win policy for governments.

Yosef Mahmoud

Photo: Flickr