Higher Cigarette Taxes - Healthier People, Wealthier State: the Hungarian Experience

Abstract

SummaryObjective: To prove that higher cigarette taxes eventually decrease smoking and do also increase state incomes from tobacco taxes by using Hungarian figures.Method: Collection and analysis of available data on tobacco use, levels of excise and value added taxes on tobacco products and state incomes originating from the tobacco sector.Conclusions: In Hungary, regular tobacco tax increases resulted in decreased cigarette consumption and its lower prevalence figures in some population groups. State incomes have increased in spite of regular cigarette tax raises. Therefore, there is on conflict of interest between the health and finance portfolios in supporting further tobacco tax increases. Hungary should use regular, above the inflation tobacco tax raises as means for improving population health. Tobacco control advocates should prevent tobacco companies´ attempts aimed at deterring decision makers from supporting such tax policies.

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“…Gallus et al (2006) estimate a price elasticity of −0.46 for 52 countries in Europe. In the United Kingdom, price elasticity is estimated at −0.5 and, in Hungary, between −0.44 and −0.37 (Szilágyi 2007;Townsend, Roderick, and Cooper 1994). Denisova and Kuznetsova (2014) estimate price elasticities in Ukraine by income deciles, ranging from −0.44 for the lowest income group to −0.11 for the highest.…”

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