A new handbook on tobacco tax recently published by the WHO confirms that the most cost-effective mechanism to reduce tobacco use is to increase excise taxes significantly, leading to price increases. While this evidence of the effectiveness of tobacco taxation is irrefutable, in 2018 it remained the least implemented MPOWER measures (in support of the implementation of the WHO Framework Convention on Tobacco Control) worldwide.
More worryingly, in many low- and middle-income countries, cigarettes have become more affordable than less in the past decade. This could be due to the fact that many countries set tax rates insufficiently and infrequently raise them, while others still use complex and inefficient tax structures.
Tobacco taxation in the WHO European Region
Taxes represent more than 75% of the retail price of the most popular brand of cigarettes in 25 out of 53 European countries. The fact that more than half of the countries in this region levy taxes below best practice is a missed opportunity to raise funds for tobacco control and the health sector in general.
In addition, a large discrepancy between the retail prices of cigarettes was observed in 2018, with the price of a pack of 20 cigarettes of the best-selling brand fluctuating between Int $ 1.82 in Belarus and Int $ 18.81 in Turkmenistan. Cigarettes have also become more affordable in 2 countries, while 13 countries have not seen a trend reversal in affordability since 2008. Strengthening tobacco taxation will help European countries to significantly reduce tobacco consumption and the health and economic damage it causes.
WHO Technical Manual on Tobacco Tax Policy and Administration
Tobacco taxes work. This is why the industry is investing so much money and effort in combating tax hikes and effective tax policies. Political decision-makers, tax officials and others involved in developing tobacco tax policy must not give in to pressure from industry and must be based on the facts when deciding on tax reform. The WHO Handbook provides all of the information needed to make the right decisions at every step of the process – from designing, evaluating, implementing and managing tax policies, to defending against industry attacks, to ensuring the right support for the change in tax policy by legislators and the general public.
Build up better with tobacco tax
Fiscal policy can also be an important factor in managing the socio-economic consequences of the COVID-19 pandemic. Interventions like the tobacco tax should be part of a comprehensive strategy for better building. Indeed, as the new report shows, increasing tobacco taxes is a SMART policy: it saves lives; Mobilizes resources; Addresses health inequalities; Reduces the pressures on health systems; and targets tobacco use, a major risk factor for NCDs.