Excise Tax Research Articles

Changes in Beer Excise Tax Levying: Consequences for Budget and Regional Development (Case of St.Petersburg)

Поэтапное повышение акцизов на пиво, предусмотренное законом об индексации ставок акцизов в 2015-2017 годах, призвано сократить потребление пива населением и содействовать росту налоговых поступлений в региональные бюджеты. Вместе с тем в условиях снижения потребительской активности населения под удар попадает пивоваренная отрасль, имеющая важное значение для отдельных субъектов РФ, таких как Санкт-Петербург, вследствие чего сокращаются налоговые поступления в бюджет региона. Шире респространяются «серые» схемы импорта пива из стран ЕАЭс, низкодоходные группы переходят на низкокачественный, в том числе и суррогатный, алкоголь. передача части функций администрирования акцизов на пиво с регионального уровня на федеральный не отвечает задачам устойчивого развития субъектов РФ. В статье на примере Санкт-Петербурга рассмотрены следующие вопросы: роль акцизов на пиво в формировании доходной части регионального бюджета, влияние повышения акцизов на пиво на их собираемость, а также на рост потребления других видов алкоголя; перспективы частичной передачи администрирования акцизов на пиво с регионального уровня на федеральный.

The ‘Specific Purpose’ Exception of the European Union Excise Tax Regime: Testing the Boundaries of Member States’ Tax Autonomy

The ‘Specific Purpose’ Exception of the European Union Excise Tax Regime: Testing the Boundaries of Member States’ Tax Autonomy

Excise Tax Setting in a Dynamic Space-time Framework

This study develops a simple model for analyzing excise tax setting in a competitive framework. Specifically, the model predicts that tax rate competition will vary for different goods based on the relative ease of cross-border shopping. To test the model, this study utilizes a dynamic space-time panel econometric model to quantify the horizontal response function for cigarette, beer, and gasoline tax rates for US states from 1960 to 2007. The empirical findings support the model predictions. Only cigarette tax rates have a horizontal response function statistically different from zero.

Excise Tax Changes and Their Impact on Gadam Sorghum Demand in Kenya

Gadam sorghum has in the recent past been promoted by various operators through a Public-Private-Partnership. Taking advantage of this, the largest brewing establishment in Kenya developed a beverage targeted for the low-end market in an effort to stem the problems associated with illicit alcoholic beverages while giving farmers a reliable income source. With its promotion, a number of farmers have devoted effort at availing grain to via contract, for the purposes of brewing. However, excise tax changes are destined to impact this arrangement by altering the conditions for different players along this particular chain. Using ARIMA time series modelling, we analyse the imposition of two tax changes — a reduction of tax in 2006 and an increase of tax in 2013 — on the demand for the product and therefore demand for Gadam sorghum grain. Data is represented by Results show a relatively large change in demand occasioned by tax increases. The paper argues that the further encouragement of sorghum growing will undoubtedly cushion farmers from climate change impacts while it’s processing can boost manufacturing to meet the targets stated in Vision 2030 while offering farmers a consistent income source.

Stuck in Neutral: Stalled Progress in Statewide Comprehensive Smoke-Free Laws and Cigarette Excise Taxes, United States, 2000-2014.

IntroductionIncreasing tobacco excise taxes and implementing comprehensive smoke-free laws are two of the most effective population-level strategies to reduce tobacco use, prevent tobacco use initiation, and protect nonsmokers from secondhand smoke. We examined state laws related to smoke-free buildings and to cigarette excise taxes from 2000 through 2014 to see how implementation of these laws from 2000 through 2009 differs from implementation in more recent years (2010–2014).MethodsWe used legislative data from LexisNexis, an online legal research database, to examine changes in statewide smoke-free laws and cigarette excise taxes in effect from January 1, 2000, through December 31, 2014. A comprehensive smoke-free law was defined as a statewide law prohibiting smoking in all indoor areas of private work sites, restaurants, and bars.ResultsFrom 2000 through 2009, 21 states and the District of Columbia implemented comprehensive smoke-free laws prohibiting smoking in work sites, restaurants, and bars. In 2010, 4 states implemented comprehensive smoke-free laws. The last state to implement a comprehensive smoke-free law was North Dakota in 2012, bringing the total number to 26 states and the District of Columbia. From 2000 through 2009, 46 states and the District of Columbia implemented laws increasing their cigarette excise tax, which increased the national average state excise tax rate by $0.92. However, from 2010 through 2014, only 14 states and the District of Columbia increased their excise tax, which increased the national average state excise tax rate by $0.20.ConclusionThe recent stall in progress in enacting and implementing statewide comprehensive smoke-free laws and increasing cigarette excise taxes may undermine tobacco prevention and control efforts in the United States, undercutting efforts to reduce tobacco use, exposure to secondhand smoke, health disparities, and tobacco-related illness and death.

Excise taxes, over-shifting, cross-elasticity, and tax revenue

ABSTRACTThis article examines cross-elasticity effects in excise taxation for markets characterized by monopolistic competition and over-shifting. Extending the constant elasticity demand model to consider cross-elasticity leads to notably different results regarding tax revenue maximization. With nonzero but weak cross-elasticity effects relative to the price elasticity, we derive a higher optimal tax-price ratio compared to prior research. With strong cross-elasticity, revenue can continually be increased by raising the excise tax. Overall, the study offers government greater incentive to use excise taxes to obtain revenue.

How does a Change in the Excise Tax on Beer Impact Beer Retail Prices in South Africa?

AbstractThis article uses price data, collected by Statistics South Africa, to estimate the effect of a change in the excise tax on the retail price of beer. We find strong evidence that the excise tax on beer is overshifted to consumers. The pass‐through coefficient is estimated at 4.83 (95% CI: 4.02; 5.64) for lager, and at 4.77 (95% CI: 4.04; 5.50) for all beer (which includes dark beer). This implies that for every R1/unit increase in the excise tax, the retail price increases by about R4.80/unit. Of the 23 brand‐packaging combinations considered, the pass‐through coefficients vary between 2.39 and 10.05 (median = 5.30). The majority of the price change in response to a tax change occurs immediately, and prices have fully adjusted two months after the excise tax increase becomes effective. Pass‐through differs substantially across packaging types. The pass‐through coefficient on 750 ml bottles is substantially lower than that of 330 ml (or 340 ml) cans and 6 × 330 ml (or 6 × 340 ml) “six‐packs.” The overshifting of the excise tax has positive implications for public health policy, since they increase the effectiveness of alcohol taxes as a tool to reduce the (excessive) consumption of beer.

Evaluating an Excise Tax on Electronic Cigarette Consumption: Early Results

Evaluating an Excise Tax on Electronic Cigarette Consumption: Early Results

Reforming Automobile Excise Taxes in the ASEAN Region for Pro-Growth and Pro-Environment Outcomes

The commencement of the ASEAN Economic Community (AEC) from 31 December 2015 could be a critical point in time for the future shape of the automotive industry in the region. ASEAN seeks to establish a ‘single market’ which is an opportunity for the industry to build and sell vehicles in a market of over 600 million consumers at a time when the environment is increasingly shaping government policies and consumer interest, including in the automotive sector. Can these objectives meet and see ASEAN become a major global hub for automobile production, potentially in new energy efficient and lower emission products? Significant progress towards the critical ‘single market’ needed to underpin growth in the automotive sector has been made in terms of cutting import tariffs on intra-regional trade, however this progress could be undermined by the emergence of various non-tariff measures appearing across the region. This paper focuses on excise taxation and the recent restructuring of some national excise systems before the commencement of the AEC and the extent to which these excise tariff measures may be acting as non-tariff barriers to the formation of a single market. In response, this paper explores the possible options in the area of developing and adopting a coordinated excise tax policy for ASEAN based on principled excise policy and reflecting changes in relation to the environment. The coordination discussed is indeed not dissimilar to the successful development of the ASEAN Harmonised Tariff Nomenclature (AHTN), and explores the concept of a possible ‘ASEAN common excise tariff’, or similar which, if allowed to progress, may assist in eventually removing excise taxation policies that could undermine the key principles of the AEC.

Uniform vs Differential Excise Taxes Under the Second-Order Approach

This paper solves the lack of a monotonicity constraint in optimal taxation models describing second-order conditions for incentive compatibility. We conclude that most findings obtained under the first-order approach, and among them notably Mirrlees’s results on Pareto efficient taxation and Corlett and Hague’s tax rule, may no longer hold beyond the assumption that the gradient of the utility function is affine with respect to ability. This reduces the desirability of differential excise taxes to a special case, while providing an argument for uniform excise taxes since, for the derivation under the second-order approach of the Atkinson and Stiglitz theorem, no further assumption is needed other than the usual weak separability of preferences.

The Effects of the Cigarette Excise Tax on State Smoking Rates, Healthcare Costs, and Beyond

During fiscal policy debates, increases in income and property incite noticeable public protest, while parallel increases in sin taxes rarely receive an equal amount of attention. But the manipulation of these may produce important costs and benefits for states. The excise tax on cigarettes is a particularly interesting case as its benefits depend on its indirect ability to decrease healthcare costs though reductions in smoking rates. This study tests whether a higher state tax rate decreases cigarette consumption, and thus, lowers tobacco-related healthcare costs. To examine this question, fixed effects multiple regression models are employed, using panel data from the Centers for Disease Control and Prevention (CDC) from 1996-2010 for all states and controlling for anti-tobacco program funding, population, and economic conditions. The final results show that significant predictive relationships exist between measures of cigarette consumption as related to price, yet these relationships only hold in predicting adult smoking rates (negative relationship), cessation rates (positive relationship), and pack sales per capita (negative relationship). Tax increases do not affect adult daily cigarette consumption rates in a significant way. Similarly, state funding for tobacco-control programs has little effect on consumption behavior. Hence, increases in cigarette may be one of the main factors acting upon quitting behavior among adults, while not affecting the number of cigarettes a smoker consumes. The policy conclusions of these results – while hesitant – promote higher cigarette as to curb smoking rates and indirectly ameliorate healthcare burdens.

Assessing the Impact of a Get Surcharge on Hawaii's Economy: A Response to Testimony from the Department of Budget and Finance on SB 727

To fund a public Long Term Care program in Hawaii, a surcharge on Hawaii's General Excise Tax was proposed (SB 727 SD1, 28th legislature). Testimony on the bill showed concern with the impact of an increase to the general excise tax on the economy. To evaluate how an increase of one half percent on Hawaii's GET might affect the economy, an analysis of a comparable GET surcharge was done. In 2005, the City and County of Honolulu implemented a one half percent surcharge on GET to fund a mass transit system. The impact of this one half percent surcharge was studied by comparing tax revenue on Oahu before and after the implementation of the surcharge with neighbor island's tax revenue. Looking at various GET categories, income tax, and total tax collected, there is no evidence that the one half percent surcharge for City and County of Honolulu business transaction had a negative impact on tax revenue.

Taxing Sugar-Sweetened Beverages to Lower Childhood Obesity: Public Health and the Law.

Consumption of sugar-sweetened beverages (SSBs) contributes to multiple health problems including obesity, diabetes, and tooth decay, especially among children. Excise taxation has been proven efficacious in changing purchasing behaviors related to tobacco use with resulting improvements in public health outcomes. Similar taxes applied to SSBs are starting to take hold internationally and domestically. SSB taxes have been proposed in over 30 U.S. jurisdictions since 2009, but only Berkeley (CA) has passed and implemented one to date. Given empirical evidence of their effectiveness, governments should consider implementation of SSB excise taxes based on uniform definitions of SSBs and other factors.

Changes in Prices After an Excise Tax to Sweetened Sugar Beverages Was Implemented in Mexico: Evidence from Urban Areas.

In 2014 an excise tax to non-alcoholic sweetened beverages (SSB) was implemented in Mexico. The objective of this paper is to study whether and to what degree these taxes passed-through onto SSB prices in urban areas overall and by region, type of beverage and package size. Prices were obtained from the National Institute of Statistics and Geography from 2011 to 2014. We applied a pre-post quasi-experimental approach using fixed effects models. In sensitivity analysis we applied other model specifications to test the robustness of the findings and we also present weighted estimations based on household purchases. The dependent variables are real prices of a specific beverage category; the main independent variables are dummies for each month of 2014, and the models adjust for time trends and seasonality. Results suggest that the SSB tax passed along to consumers for all SSBs and we found overshifting for the carbonated SSBs. A greater effect is seen among the small package sizes, and we see heterogeneous effects by region. Estimating the effect of the tax on prices is important to understand the potential effect on consumption.

Higher Retail Prices of Sugar-Sweetened Beverages 3 Months After Implementation of an Excise Tax in Berkeley, California.

We assessed the short-term ability to increase retail prices of the first US 1-cent-per-ounce excise tax on the distribution of sugar-sweetened beverages (SSBs), which was implemented in March 2015 by Berkeley, California. In 2014 and 2015, we examined pre- to posttax price changes of SSBs and non-SSBs in a variety of retailers in Berkeley and in the comparison cities Oakland and San Francisco, California. We examined price changes by beverage, brand, size, and retailer type. For smaller beverages (≤ 33.8 oz), price increases (cents/oz) in Berkeley relative to those in comparison cities were 0.69 (95% confidence interval [CI] = 0.36, 1.03) for soda, 0.47 (95% CI = 0.08, 0.87) for fruit-flavored beverages, and 0.47 (95% CI = 0.25, 0.69) for SSBs overall. For 2-liter bottles and multipacks of soda, relative price increases were 0.46 (95% CI = 0.03, 0.89) and 0.49 (95% CI = 0.21, 0.77). We observed no relative price increases for nontaxed beverages overall. Approximately 3 months after the tax was implemented, SSB retail prices increased more in Berkeley than in nearby cities, marking a step in the causal pathway between the tax and reduced SSB consumption.

The Weakness of Stern Alcohol Control Policies.

To test the total consumption model claiming that alcohol-related ill health can best be diminished by a policy of severe restrictions and high price. The associations between an index measuring the severity of the alcohol policy, total alcohol consumption and number of disability-adjusted life years (DALYs) lost due to alcohol were compared in 30 OECD countries in 2005. No significant correlations were found between alcohol policy index, alcohol consumption and the number of DALYs due to alcohol use. In regression analysis, alcohol policy index and alcohol consumption were not related to alcohol-related DALYs. Excise tax rate was not related to alcohol-related DALYs (25 countries with tax rate data). These findings suggest that the total consumption model fails. Alcohol-related ill health seems to be mainly due to alcohol dependence, both clinical and subclinical, not to moderate drinking.

On the Federal Excise Tax Exemption for U.S. Gasoline Exports

On the Federal Excise Tax Exemption for U.S. Gasoline Exports

Are there Carbon Savings from U.S. Biofuel Policies? The Critical Importance of Accounting for Leakage in Land and Fuel Markets

We develop an analytical and numerical multi-market model that integrates land, fuel, and food markets, and link it with an emissions model to quantify the importance of carbon leakage relative to the intended emissions savings resulting from the Renewable Fuel Standard (RFS) for conventional biofuels. The expansion of biofuels mandated by the RFS can increase or decrease GHG emissions depending on the policy regime being evaluated. For example, replacing the Volumetric Ethanol Excise Tax Credit (VEETC) with the RFS, as occurred at the end of 2011 when the VEETC was allowed to expire, would reduce emissions by 2.0 tgCO2e in 2015 for an expansion of ethanol of 11.4 billion liters. A policy regime consisting of the RFS alone would increase emissions by at least 4.5 tgCO2e for the same expansion of ethanol. Our findings highlight an important tension between land and fuel market leakage. Policy regimes that result in less land market leakage tend to lead to more domestic fuel market leakage per liter of ethanol added.

Are there Carbon Savings from US Biofuel Policies? The Critical Importance of Accounting for Leakage in Land and Fuel Markets

We develop an analytical and numerical multi-market model that integrates land, fuel, and food markets, and link it with an emissions model to quantify the importance of carbon leakage relative to the intended emissions savings resulting from the Renewable Fuel Standard (RFS) for conventional biofuels. The expansion of biofuels mandated by the RFS can increase or decrease GHG emissions depending on the policy regime being evaluated. For example, replacing the Volumetric Ethanol Excise Tax Credit (VEETC) with the RFS, as occurred at the end of 2011 when the VEETC was allowed to expire, would reduce emissions by 2.0 tgCO2e in 2015 for an expansion of ethanol of 11.4 billion liters. A policy regime consisting of the RFS alone would increase emissions by at least 4.5 tgCO2e for the same expansion of ethanol. Our findings highlight an important tension between land and fuel market leakage. Policy regimes that result in less land market leakage tend to lead to more domestic fuel market leakage per liter of ethanol added.

Excise Tax Setting in a Dynamic Space-Time Framework

This study develops a simple model for analyzing excise tax setting in a competitive framework. Then, this study utilizes a dynamic space-time panel econometric model to explore cigarette and beer tax rate setting from U.S. states from 1960-2007. The empirical findings support the model predictions. Both cigarette and beer taxes are highly persistent, but cigarette tax rates are more competitive (spatially correlated) across states.