Our study provides important empirical evidence of a relationship between tax structure and cigarette consumption. We find that a change from a specific to an ad valorem structure is associated with a 6%-11% higher cigarette consumption. In addition, a change from uniform to tiered structure is associated with a 34%-65% higher cigarette consumption. The results are consistent with existing evidence and suggest that a uniform and specific tax structure is the most effective tax structure for reducing tobacco consumption.

Contributors K-WC wrote the original manuscript, conducted the empirical analysis and revised the manuscript. CS provided valuable insight on the analysis. HML managed the data and conducted statistical run. The other authors all took an active role in developing the original ideas for the study, critiquing the analysis and revising the manuscript.

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BackgroundIn November 2021, the Tobacconomics team published the second edition of theCigarette Tax Scorecardwhich evaluates cigarette taxation in each country based on four components—cigarette price, affordability change, tax share and tax structure. This study examines the relationship between the overall cigarette tax score and tobacco excise tax revenue between 2014 and 2018.MethodsUsing cigarette tax scores from theTobacconomics Cigarette Tax Scorecardand tobacco excise tax revenue information from WHO, this analysis is based on ordinary least squares estimations to assess the association between the overall cigarette tax scores and tobacco excise tax revenues per capita controlling for countries’ tobacco control environment, sociodemographic characteristics and country and year fixed effects.ResultsA 1-point higher overall cigarette tax score is associated with higher tobacco excise tax revenue per capita of $11.98 (in constant 2018 purchasing power parity international dollars). For low and middle-income countries and lower performing countries at baseline, a 1-point higher overall cigarette tax score is associated with higher tobacco excise tax revenue per capita of $11.32 and $6.92, respectively. If all countries had increased their scores to ‘5’, the tobacco excise tax revenue per capita would have increased by 22.51%.ConclusionsHigher overall cigarette tax scores are associated with higher tobacco excise tax revenue per capita. Countries aiming to reach higher cigarette tax scores would be able to reduce tobacco use and increase their tobacco tax revenue, which can be allocated to development priorities.