Tobacco Tax Research Articles

Coordination Between Tobacco Resource Development and Regional Economy

Objectives: This paper studies the relationship between the development of tobacco resources and the coordination of regional economy under the background of tobacco monopoly. Methods: This paper takes the institutional change theory as the theoretical fulcrum and the cost-benefit analysis as the main line, the correlation between regional economy and the development of tobacco industry is compared. This paper expounds the evolution history and institutional characteristics of China's tobacco monopoly system, and analyzes the changes of production, supply and marketing relationship, institutional characteristics and benefit distribution of the tobacco industry in each period. After the theoretical and empirical analysis of the costs and benefits of China's tobacco monopoly system, this paper studies the role of tobacco resource development in promoting regional economy by comparing the costs and benefits of radical and gradual reform. Results: On the premise of retaining tobacco monopoly, we should take the separation of government and enterprises and the reform of tobacco fiscal and tax system as the breakthrough. This can change the tobacco industry from administrative monopoly to economic monopoly and form tobacco trust. The linkage mechanism of "tax, profit and price" should be established to protect the interests of tobacco farmers. A tobacco auction center shall be established and a third-party tobacco rating agency shall be guided. Conclusion: The net income of the new system is higher than that of the old system. The healthy development of tobacco industry can promote regional economy.

Estimating the Impact of Tobacco Parity and Harm Reduction Tax Proposals Using the Experimental Tobacco Marketplace.

Taxes are a demonstrably effective method to suppress tobacco use. This study examined the effects of the tobacco parity (i.e., imposing taxes equally on all tobacco products) and the harm reduction (i.e., applying taxes in proportion to the products’ levels of harm) tax proposals on demand and substitution across products. A crowdsourced sample of cigarette smokers (n = 35) completed purchasing trials with increasing tax magnitudes across different tax tiers in the Experimental Tobacco Marketplace in a repeated-measures design. Products were placed in three tax tiers (high, medium, and no tax) according to each proposal’s goal. The results indicated that total nicotine (mg) purchased was not significantly different between the proposals, with higher taxes yielding lower demand. However, as taxes increased, the tobacco parity proposal decreased the purchasing of all tobacco products and increased the purchasing of medicinal nicotine (i.e., the no tax tier). Conversely, the harm reduction proposal resulted in greater purchases of electronic nicotine delivery systems and smokeless tobacco (i.e., the medium tax tier). These findings support tobacco taxation as a robust tool for suppressing purchasing and suggest that differential taxation in proportion to product risk would be an effective way to incentivize smokers to switch from smoked to unsmoked products. Further studies should investigate the unintended consequences of their implementation.

Напрями удосконалення акцизної політики у сфері тютюнових виробів в Україні

The article analyses the ways to improve tobacco excise taxation in Ukraine considering a respective EU Member States experience, consequences of national reforms held in previous years, as well as challenges and potential threats caused by the pandemic. A worsening economic situation and the recent decline in income compounded the existing problems related to tobacco taxation in Ukraine. The increase of excise tax rate on cigarettes by 20% annually till 2025 and an inconsistent decision on more than four times increase of excise tax rates on electronically heated tobacco products (EHTP) pose a risk of boosting illicit trade. The advance payment of excise tax on imported tobacco products, in turn, negatively affects finances of importers due to the working capital diversion. Following that, the priority steps with regard to the excise policy of Ukraine should be aimed at: 1) revision of the existing plan of increasing tax rates on cigarettes by slowing down the growth of tax burden and simultaneous expansion of the plan till 2028; 2) correcting the burdensome reform on excise taxation of EHTP to establish more liberalized tax regime 3) switching to payment of excise tax on imported tobacco products during customs clearance. The mentioned initiatives taking into account a strong need to improve a fiscal situation in Ukraine due to the spread of COVID-19 will reduce a negative impact of increasing excise tax rates and administration procedures on tobacco industry. They will also prevent the growth of illicit trade in tobacco products and thus will contribute to improving the efficiency of tax system and strengthening the confidence of business entities.

Price and expenditure elasticity of cigarette demand in El Salvador: a household-level analysis and simulation of a tax increase

BackgroundIn El Salvador, 8.8% of adults 15 years and older smoke cigarettes. Little is known about the sensitivity of cigarette consumption among the adults in El Salvador to tax and...

Electronic cigarettes and public health awareness: a cross-sectional analysis of Google search inquiries.

The number of American adults who use electronic nicotine delivery systems (ENDS) increased by 3 million people in 2018, up 38.3% from 8.1 to 11.2 million. Search data for ENDS were analyzed against relevant traits including state longitude, tobacco tax rate and national tobacco program funding. Searches increased 88% (95% CI, 70-100) over the last 5 years and peaked on 8 September 2019, after the CDC issued a warning about the link between ENDS and high-profile lung damage cases. Searches aimed at buying ENDS subsequently dropped 25% (95% CI, 20.1-29.6), while health-related ENDS searches spiked to their all-time high, increasing 22% (95% CI, -6 to 55) compared with the first half of 2019. ENDS searches are now more concentrated than 5 years ago, reversing the trend of the early 2010s, likely because certain states have passed laws to curb the use of ENDS. The public prefers searching for 'vaping' over 'e-cigarette' in a phenomenon similar to 'high fructose corn syrup' versus 'sugar'. Consequently, public policy discussions and public education campaigns need to use 'vaping' terms, and more states should enact policies that are strongly associated with lower ENDS usage, many of which we identify.

The Association of California's Proposition 56 Tobacco Tax Increase With Smoking Behavior Across Racial and Ethnic Groups and by Income.

On April 1, 2017, California Proposition 56 (Prop 56) was implemented, increasing the excise tax on cigarettes by $2/pack. This study compares the association of Prop 56 with smoking prevalence and smoking intensity across racial/ethnic groups, further examining distinctions across income subgroups within each racial/ethnic group. The study used pooled cross-sectional data from the 2012-2018 California Behavioral Risk Factor Surveillance System. We examined two outcomes: current smoking prevalence and smoking intensity conditional on current smoking. A two-part econometric model was used to estimate the association of Prop 56 with smoking prevalence and intensity using multiple logistic regression and multiple linear regression, respectively. The two-part model was run separately for all adults (full sample) and each racial/ethnic group. Within each racial/ethnic group, we ran stratified analyses by income subgroups. The results indicated that Prop 56 was negatively associated with smoking prevalence among full sample, Hispanic, White, and African American adults and negatively associated with smoking intensity among full sample and White smokers. Stratified analyses by race/ethnicity and income showed that Prop 56 was negatively associated with smoking prevalence among low-income full sample and White adults and among middle-income smokers in the full, Hispanic, White, African American, and Asian samples. Prop 56 was negatively associated with smoking intensity among middle-income Hispanic and high-income White smokers. The association between Prop 56 and smoking intensity was positive among high-income African American smokers. Prop 56 was associated with a reduction in smoking prevalence across multiple racial/ethnic groups, particularly within the low- and middle-income subgroups. Our findings indicate that the reduction in smoking prevalence immediately following the implementation of Prop 56 tobacco tax increase was significant across a variety racial/ethnic groups, particularly low- and middle-income subgroups. We found differential responses in smoking prevalence across income groups among Whites but not among racial/ethnic minorities. We found no evidence of any significance association between Proposition 56 and smoking intensity among minorities and economically vulnerable populations, except for middle-income Hispanics. Researchers, policy makers, and advocates should consider the additional merits of targeted, community-based, noneconomic tobacco control interventions in reaching low- and middle-income groups within racial/ethnic minorities.

Making smoking history: temporal changes in support for a future smoking ban and increasing taxes in the general population of Denmark

BackgroundAn end date for smoking has been adopted in several countries and is now being discussed by governments all over the world. However, little is known about temporal changes in...

Promoting convergence and closing gaps: a blueprint for the revision of the European Union Tobacco Tax Directive

Background and aimsDespite the European Union (EU) Tobacco Tax Directive (TTD), a lack of convergence in EU tobacco prices promotes high levels of cross-border shopping and down-trading from factory-made (FM)...

The battle to increase tobacco taxes: Lessons from Philippines and Ukraine

IntroductionWhile increasing taxes on tobacco is one of the most effective tobacco control measures, its adoption has been slow compared to other tobacco control policies. Given this, there is an urgent need to better understand the political and economic dynamics that lead to its adoption despite immense tobacco industry opposition. The primary aim of this study is to explore the process, actors, and determinants that helped lead to the successful passage of the 2012 Sin Tax Reform Law in the Philippines and the 2017 seven-year plan for tobacco tax increases in Ukraine. Method: Under the guidance of the Advocacy Coalition Framework, we used a case study approach gathering data from key informant interviews (n = 37) and documents (n = 56). Subsequently, cross-case analysis was undertaken to identify themes across the two cases. Results: We found that external events in the Philippines and Ukraine triggered policy subsystem instability and tipped the scale in the favor of tobacco tax proponents. In the Philippines, elections brought forth a new leader in 2010 who was keen to achieve universal health care and improve tax collection efficiency. In Ukraine, the European Union Association Agreement came into force in 2017 and included the Tobacco Products Directive requiring Ukraine to synchronize its excise taxes to that of the European Union. Exploiting these key entry points, tobacco tax proponents formed a multi-sectoral coalition and used a multi-pronged approach. In both countries, respected economic groups and experts who could generate timely evidence were present and used local as well as international data to counter opponents who also used an array of strategies to water down the tax policies. Conclusions: Findings are largely consistent with the Advocacy Coalition Framework and suggest the need for tobacco tax proponents to 1) form a multi-sectoral coalition, 2) include respected economic groups and experts who can generate timely evidence, 3) use both local data and international experiences, and 4) undertake a multi-pronged approach.

The effects of tobacco taxation and pricing on the prevalence of smoking in Africa

BackgroundTobacco use continues to kill millions of people globally, making it one of the major causes of preventable deaths. Notwithstanding, there has been a very marginal fall in the prevalence of tobacco smoking in Africa. Since taxes (hence prices) are part of the main measures suggested to decrease the demand for tobacco products, this study investigates how tobacco taxation and pricing influence the prevalence of smoking in 24 African countries.MethodsUsing panel data on 24 African countries sourced from the World Health Organization (WHO) and the World Bank databases for the period 2010 to 2016, this study employs the system Generalized Method of Moments (GMM) estimator to investigate the effects of tobacco taxation and pricing on the prevalence of smoking. The system GMM estimator is used due its ability to deal with potential endogeneity of tobacco taxation and pricing: the likelihood that the prevalence of smoking can influence tobacco taxation and pricing which may lead to biased estimates.ResultsTobacco taxation and pricing have negative significant effects on the prevalence of smoking among the selected countries after controlling for growth of Gross Domestic Product (GDP) per capita, urbanization, death rate and net inflows of Foreign Direct Investment (FDI). Specifically, a percentage increase in tobacco price is found to decrease the prevalence of smoking by between 0.11 to 0.14%, while a percentage increase in tobacco tax decreases the prevalence of smoking by between 0.25 to 0.36%, all at 1% level of significance.ConclusionSince tobacco taxation and pricing are found to have negative significant effects on the prevalence of smoking, the implication is that, their use can be intensified by African policy makers towards achieving the WHO Framework Convention on Tobacco Control (FCTC) recommended targets and hence decrease the prevalence of tobacco smoking in Africa. Doing so may therefore help in achieving the Sustainable Development Goal (SDG) 3.5 (prevention and treatment of substance abuse), thereby reducing the colossal number of smoking attributable deaths.

Illicit cigarette trade in the cities of Pakistan: comparing findings between the consumer and waste recycle store surveys

BackgroundConcerns about the magnitude of illicit cigarette trade have prevented the Government of Pakistan from increasing tobacco taxes. We estimated the proportion of illicit cigarettes sold in Pakistani cities. Moreover,...

Tobacco Endgame Simulation Modelling: Assessing the Impact of Policy Changes on Smoking Prevalence in 2035

Smoking causes substantial amount of mortality and morbidity. This article presents the findings from simulation models that projected the impact of five potential Tobacco Endgame strategies on smoking prevalence in Ontario by 2035 and expected impact of smoking prevalence “less than 5 by 35” on tax revenue. We used Ontario SimSmoke simulation for modelling the expected impact of four strategies: plain packaging, free cessation services, decreasing the number of tobacco outlets, and increasing tobacco taxes. Separate models were used to project the impact of increasing the minimum age to legally purchase tobacco to 21 years on smoking prevalence and impact of price and tax increase to achieve “less than 5 by 35” on taxation revenue. The combined effect of four strategies in Ontario SimSmoke Model are expected to reduce smoking prevalence by 8.5% in 2035. Increasing tobacco taxes had the greatest independent predicted decrease in smoking prevalence (2.8%) followed by raised minimum age for legal purchase to 21 years (2.4%), decreasing tobacco outlets (1.5%), free cessation services (0.7%), and plain packaging (0.6%). Increasing tobacco excise tax and prices are projected to have minimal impact on taxation revenue, with a decrease from 1.5 billion to 1.2 billion annual tax receipts.

Illicit tobacco trade: empty pack survey in eight Argentinean cities

ObjectiveTo estimate the prevalence of illicit tobacco trade (ITT) and different ITT modes—tax stamp counterfeiting and smuggling—in Argentina.DesignCross-sectional study using an empty tobacco pack survey with a simple random cluster...

Demand for tobacco products in Bangladesh

BackgroundTobacco tax increase is considered as one of the most effective means to reduce tobacco consumption and its consequences. An increase in taxes, which results in an increase in the...

Tobacco taxes for improving welfare and distributional outcomes: the case of Georgia.

Georgia has one of the highest smoking prevalence and tobacco-related morbidity and mortality rates in Europe and Central Asia. Nonetheless, tax increases on tobacco products are often opposed due to concerns of regressive fiscal effects. This article provides evidence on the long-term welfare and distributional impacts of increasing cigarette taxes in Georgia. An Extended Cost-Benefit Analysis is used to simulate the distributional effect of raising taxes on cigarettes. It weighs short-term losses due to higher tobacco prices with long-term benefits related to reduced medical expenses and additional earnings associated with extended life expectancy. Household expenditure data are used to estimate decile-specific price elasticities of demand for cigarettes, accounting for heterogeneous behavioral responses by income-group. Consistent with previous literature, cigarettes price elasticity decreases with income. A simulated 50% cigarette price increase would yield positive net gains for the lowest three deciles; increase the available income of the poorest 10% of the population by an average of 1% and, as a result, lift up to 7000 people out-of-poverty in 2017. The effects would be highly progressive. As lower-income households tend to be more responsive to price changes on cigarettes, they stand to benefit most from the health and economic consequences of taxing tobacco. This article shows that in addition to boosting fiscal revenues, increasing cigarette prices would lead to progressive and positive net gains for the poorest households in Georgia.

Impact of Cigarette Prices on Cigarette Sales and Consumption in Malaysia

To achieve the target and to reduce the cost and burden from smoking, the Malaysian government regulates and implements several tobacco control policies and campaigns to control cigarette consumption and reduce the proportion of smokers in the Malaysian population. It is undeniable that tobacco tax policy plays a significant role in reducing cigarette consumption globally, as mentioned in the World Health Organization (WHO) FCTC Article 6 (WHO, 2003). An effective taxation policy would reduce cigarette demand and at the same time, generate additional tax revenues for the government. For example, Ross & Al-Sadat (2007) predicted for Malaysia that an increase of 25% in excise tax would reduce cigarette consumption by 3.37% and will generate an increase of RM434 million in tax revenues. In addition, Mohamed Nor et al. (2013) contributed to a study which concluded that the excise tax rate in 2009 was not at the optimal level and had not garnered the maximum tax revenue, showing that the optimal real excise tax rate should have been about 16.5% higher in 2009. While the study was carried out in 2009, the findings have proven that Malaysia’s cigarette tax rate was not high enough at that point in time and even now. This suggests that the Malaysian government should continue to increase cigarette tax rates without worrying about the argument by the industry that higher tax will reduce government revenue.

Analysing the trend of illicit tobacco in the Philippines from 1998 to 2018

Tobacco taxation is the most effective measure to reduce cigarette consumption and consequently improve public health outcomes. It is also an important source of government revenue. The presence of an...

Barriers and facilitators to smoking cessation among HIV-infected people who inject drugs (PWID) in Hanoi, Vietnam: a qualitative study.

In Vietnam, 60% of men living with HIV smoke tobacco, and 92% of HIV-infected people who inject drugs (PWID) smoke tobacco. Tobacco use increases mortality through increased health risks including tuberculosis and malignancy in HIV-infected smokers. However, tobacco use treatment is not widely available in Vietnam. The objective was to examine current barriers and facilitators of smoking cessation and tobacco use treatment for HIV-infected PWID in Hanoi, Vietnam. Native speaking ethnographers conducted semi-structured qualitative interviews about tobacco use and tobacco use treatment with sixteen HIV-infected PWID and eight healthcare providers, recruited from four HIV-Methadone Maintenance Treatment (MMT) clinics in Hanoi, Vietnam. Interviews were recorded, transcribed, and translated for thematic analysis in Dedoose. Clients and providers had learned the general health risks of smoking from public awareness campaigns. Half had tried to quit previously, often motivated by advice from family members but not by HIV providers' advice. Almost all clients did not want to quit, citing the low price of tobacco, prevalence of smoking in Vietnam, and physical cravings. HIV provider's counseling was brief, inconsistent, and limited by low provider knowledge and competing burdens of HIV and injection drug use. Providers recently trained by NGO-led seminars on tobacco prioritized tobacco use treatment. Smoking cessation efforts for people living with HIV/AIDS (PLHA) and PWID smokers in Hanoi, Vietnam could benefit from further community public awareness campaigns, and exploring increased tobacco taxation. Tobacco use treatment at HIV clinics could benefit from involving family and friends in cessation, and training providers in treatment methods.

A dynamic modelling analysis of the impact of tobacco control programs on population-level nicotine dependence

According to the ‘hardening hypothesis’, average nicotine dependence will increase as less dependent smokers quit relatively easily in response to effective public health interventions, so that sustained progress in reducing smoking prevalence will depend on shifting the emphasis of tobacco control programs towards intensive treatment of heavily dependent smokers (who comprise an increasing fraction of continuing smokers). We used a system dynamics model of smoking behaviour to explore the potential for hardening in a population of smokers exposed to effective tobacco control measures over an extended period. Policy-induced increases in the per capita cessation rate are shown to lead inevitably to a decline in the proportion of smokers who are heavily dependent, contrary to the hardening hypothesis. Changes in smoking behaviour in Australia over the period 2001‒2016 resulted in substantial decreases in current smoking prevalence (from 23.1% in 2001 to 14.6% in 2016) and the proportion of heavily dependent smokers in the smoking population (from 52.1% to 36.9%). Public health interventions that have proved particularly effective in reducing smoking prevalence (tobacco tax increases, smoke-free environment legislation, antismoking mass media campaigns) are expected to also contribute to a decline in population-level nicotine dependence.

Ten Years of the Tobacco Control Act in New York City

This article describes the impact of the 2009 Family Smoking and Prevention Tobacco Control Act (TCA) on local tobacco control through the lens of New York City’s experience during the first 10 years after the TCA was enacted, highlighting one meaningful change and an opportunity that has failed to materialize. Much of the analysis regarding the TCA highlights the U.S. Food and Drug Administration’s (FDA) new powers and the TCA’s impact on a national level. However, the TCA also opened up opportunities for local governments to pursue sound tobacco control policies that previously seemed fraught with high legal risk. This article focuses on two aspects of the TCA. First, the TCA weakened one of the tobacco industry’s most reliable litigation weapons—preemption. Second, the TCA authorized the FDA to combat the illicit trade of tobacco products. Despite clear language in the TCA, the FDA has not signaled an inclination to take action regarding illicit trade in the context of tobacco tax evasion.