Objective
To investigate the feasibility of addressing the public health concerns of tobacco consumption through increased taxation, while preserving or augmenting government revenues in Grenada.
Methods
Purposive sampling methods were used to ensure data availability and geographical representativeness. Average price per 20-pack of the most-sold brands of cigarettes was calculated using data from three major supermarkets. The World Health Organization's Tax Simulation Model was used, with excise tax rates adjusted to effect 5%, 10%, and 15% consumption decreases.
Results
A 17% to 117% excise tax increase on the cost, insurance, and freight (CIF) value would achieve a 5% consumption decrease. Total government revenues would grow 8.7% and excise tax revenues would increase 11%. The average excise tax per 20-pack would move from EC$ 3.24 (2014 US$ 1.20) to EC$ 3.80 (US$ 1.41), while the average price per pack would increase to EC$ 9.21 (US$ 3.41) from EC$8.48 (US$ 3.14). In the 10% and 15% consumption reduction scenarios, excise taxes would have to be increased by 33% and 50% (to 133% and 150% of CIF, respectively), pushing the average excise tax per pack to EC$ 4.37 (US$ 1.62) and EC$ 4.90 (US$ 1.81), respectively.
Conclusion
In Grenada, consumption can be reduced alongside growth in government revenues, making available additional resources for health. This aligns with the literature, which indicates that taxation can be effective in pursuing the public health objective of reduced incidence of smoking-related illnesses via reduced consumption.
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