Are Tobacco Taxes Really Regressive?

Fuchs, Alan; Meneses, Francisco

doi:10.1596/25969

Cited by 5 publications

(3 citation statements)

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“…Our study contributes to the literature on the distributional impact of higher tobacco taxes. Though the regressivity argument has been commonly used against tobacco price increases and was perceived to be a barrier in Armenia, similar to other recent studies, 25,26,60 we do not find that higher tobacco prices in Armenia would necessarily disproportionately burden the poor. As recent studies have found, higher price responsiveness among the poor may shift the burden of additional taxes to the rich.…”

Section: Discussionsupporting

confidence: 88%

The Health Gains, Financial Risk Protection Benefits, and Distributional Impact of Increased Tobacco Taxes in Armenia

Postolovska

Lavado

Tarr

et al. 2017

Health Systems & Reform

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The majority of Armenian adult males smoke, yet tobacco taxes in Armenia are among the lowest in Europe and Central Asia. Increasing taxes on tobacco is one of the most cost-effective public health interventions, but many opponents often cite regressivity as an argument against tobacco taxation. We use a mixed-methods approach to study the potential regressivity of tobacco taxation and the extent to which the regressivity argument hindered increases in tobacco taxation in Armenia. First, we pursued an extended cost-effectiveness analysis (ECEA) to assess the health, financial, and distributional consequences (by consumption quintile) of increases in the excise tax on cigarettes in Armenia. We simulated a hypothetical price hike leading to a tax rate of about 75% of the retail price of cigarettes, which would be fully passed on to consumers. Second, we conducted a series of stakeholder interviews to examine the importance of the regressivity argument and identify the factors that allowed tobacco tax increases to be adopted as public policy in Armenia. We show that increased excise taxes would bring large health and financial benefits to Armenian households. Half of tobacco-related premature deaths and 27% of associated poverty cases averted would be concentrated among the bottom 40% of the population. Though regressivity was raised as a concern at the initial stages of the policy adoption process, our qualitative stakeholder analysis indicates that the recent accession to the Eurasian Economic Union and the fiscal constraints faced by the government created a window of opportunity for tobacco taxation to be placed on the policy agenda and adopted as government policy, and the ECEA findings were an important input into the process.

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Section: Discussionsupporting

confidence: 88%

The Health Gains, Financial Risk Protection Benefits, and Distributional Impact of Increased Tobacco Taxes in Armenia

Postolovska

Lavado

Tarr

et al. 2017

Health Systems & Reform

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show abstract

“…For example, long-term medical costs have declined in Chile and Moldova following tax increases on tobacco products. 4 28 Similar evidence from Nepal on health taxes’ potential economic effects will be needed to counter the industries’ arguments. Concurrently, the media, the civil society, and the public can help by publicising the efforts of the political lobby to undermine taxes, including industries’ efforts to influence the public in the pretext of CSR.…”

Section: Discussionmentioning

confidence: 99%

Perceptions of key stakeholders on taxes on tobacco and alcohol products in Nepal

Acharya,

Karmacharya,

Paudel

et al. 2023

BMJ Glob Health

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BackgroundNon-communicable diseases (NCDs) are on the rise in Nepal. Consumption of alcohol and tobacco products remains high. Taxes on these products are significantly below the rate recommended by the WHO. In an effort to understand the reasons behind the slow progress towards the adoption of higher health taxes to curb NCDs, we documented the perceptions of key stakeholders on health taxes, including perceived barriers and facilitators to adopting higher health taxes.MethodsWe conducted 45 in-depth interviews with individuals comprising government officials; producers, wholesale distributors and sellers of alcohol and tobacco products; and consumers and representatives from civil society organisations. We conducted a thematic analysis of the resulting data.ResultsRespondents from alcohol and tobacco industries are not supportive of higher health taxes. They argued that higher taxes can increase illicit trade and worsen inequality. Strikingly, several government officials shared the industries’ concerns, arguing that health taxes have limited potential to reduce consumption of alcohol and tobacco products to help curb NCDs. In terms of barriers to adoption of higher health taxes, several local government representatives opined that close ties between industries and politicians at the federal level is a major hindrance.ConclusionsIn order to adopt higher health taxes, the government will need to counter the false narrative pushed by alcohol and tobacco industries on the negative economic effects of such taxes. Health taxes earmarked for NCDs need to reflect the amount of revenue raised, reoriented towards prevention efforts and communicated clearly to the public.

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“…As recent studies have found, the higher responsiveness to prices among the poor may shift the burden of incremental taxes to the rich, thus making tobacco taxes more progressive. (31,32,62) Not only can higher excise taxes reduce the number of deaths through smoking cessation, (63) but they can also decrease potential OOP expenditures on treatment for tobacco-related disease. Given the large costs associated with such treatment, by encouraging smokers to quit or averting initiation, tobacco taxes can bring substantial financial risk protection to individuals by preventing such OOP medical expenditures altogether.…”

Section: Discussionmentioning

confidence: 99%

Estimating the Distributional Impact of Increasing Taxes on Tobacco Products in Armenia

Postolovska¹,

Lavado²,

Tarr³

et al. 2017

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Are Tobacco Taxes Really Regressive?

Cited by 5 publications

References 0 publications

The Health Gains, Financial Risk Protection Benefits, and Distributional Impact of Increased Tobacco Taxes in Armenia

The Health Gains, Financial Risk Protection Benefits, and Distributional Impact of Increased Tobacco Taxes in Armenia

Perceptions of key stakeholders on taxes on tobacco and alcohol products in Nepal

Estimating the Distributional Impact of Increasing Taxes on Tobacco Products in Armenia

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