International locations share examples of how tobacco tax insurance policies create win-wins for growth, well being and revenues

In 2018 only 38 countries, covering 14% of the global population had sufficiently high tobacco taxes – which means taxing at least 70% of the cost of these health-harming products. By implementing proven policies like tobacco taxes, the costs created by the tobacco industry to local communities and nation can be avoidable.  It is a win for population health, revenue and for development.

How The Gambia
reduced cigarette
importation by over 60% using taxation

In 2012, prices
of cigarettes in The Gambia were among the lowest in the African region. With
WHO support, the country made a plan to raise the price of cigarettes. It
worked so well the country went on to implement an even more ambitious plan for
tobacco tax increases in the following years. As a result, revenues generated
in 2018 were nearly three times as high compared to 2011. Meanwhile, cigarette
importation was reduced by over 60%. 

“The results of these plans exceeded our expectations,” said Mambury Njie, Honorable Minister of Finance and Economic Affairs of The Gambia. He said this convinced the country that in-creasing tobacco taxes is a win-win for bringing in more revenues while reducing demand. 

“I hope that our experience in The Gambia encourages other countries to embark on their own reforms, particularly at this COVID-19 pandemic times when the need for domestic resource mobilization that is health inclusive is paramount,” he said.

 

Sri Lanka uses specific excise tax to decrease cigarette consumption

Sri Lanka now proudly meets the minimum recommended taxation level for cigarettes, with taxes reaching 77% of the price of the most sold brand. In line with best-practices in the WHO Tobacco Taxation manual, Sri Lanka primarily relies on a specific excise tax, meaning a tax levied on selected products based on quantity, such as number of cigarettes or weight of tobacco.

It increased the tax at regular intervals to effectively decrease the affordability, and  consumption of these deadly products.  

“We are certain that following more of the best practices outlined in the manual will help us address these pending challenges and improve the health of the Sri Lankan population,” said Nimal Siripala de Silva, Minister of Health of Sri Lanka.

 

Increase in taxation of cigarettes in Colombia causes 34% drop in cigarette consumption

In 2016, Colombia had the second-cheapest cigarettes in the Western hemisphere, second only to Paraguay (a large producer with notoriously low prices). 

As part of a larger fiscal reform in 2017, the specific tax rate for cigarettes was tripled from 2016 (COL$700 per pack) to 2018 (COL$2,100 per pack), with a 4% real increase per year after 2019. The reform was a win-win-win for Colombia. 

Not only did cigarette consumption fall by 34% by 2018, but excise tax revenues, which are earmarked for funding of universal health coverage (UHC), almost doubled.

Therefore, the tobacco tax reform decreased tobacco consumption (along with associated death, disease, and costs); increased revenues; and contributed the financial sustainability of the UHC system.  A win-win-win.

“When thinking about how to save lives, taxes are not usually the first tool that comes to mind. Nonetheless, increasing taxes on harmful products such as tobacco, are a very impactful and proven way of reducing consumption of health-harming products, along with their associated death, disease, and health-care costs,” said Colombian Economist Mauricio Santamaría.

 

“Sin Tax” expands health coverage in
the Philippines

New taxes on tobacco and alcohol
enable the poorest and most vulnerable Filipinos to obtain health services.

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