How does the e-cigarette industry respond to tax adjustments? Evidence from China.

INTRODUCTION: China enacted an excise tax on e-cigarettes in November 2022, which offers a distinctive opportunity to examine the industry's reactions to this fiscal adjustment. This study delves into the industry's pricing strategies following the introduction of the excise tax, facilitating a thorough assessment of the subsequent impact on market dynamics and the government's revenue streams. METHODS: We developed a TaXSiM model specifically tailored for e-cigarettes in China by integrating the country's e-cigarette tax framework. Our approach involved leveraging market data obtained from a representative product, the RELX Phantom Series, to ensure the model's effectiveness and relevance. RESULTS: The excise implementation of 2022 significantly heightened the tax burden on e-cigarettes, marking an increase of approximately 150 RMB per device and 19 RMB per cartridge. Despite these financial pressures, electronic cigarette firms exemplified by RELX, strategically endeavored to sustain competitiveness. Their approach involved initially implementing a 'Razor blade model' and eventually a 'comprehensive under-shifting' strategy, which mitigated the health impact of the tax hike, resulting in a relatively minor decline in sales while amplifying the impact on tax revenue. However, this strategic pricing maneuver came at a cost, as it led to a substantial decrease in profits, and therefore expedited a reshuffling of the industry by compelling smaller brands to leave the market rapidly. CONCLUSIONS: To effectively curb the use of e-cigarettes through tax policies, it is advisable to relocate the imposition of excise taxes on electronic cigarettes to the retail stage. This shift aims to narrow the scope for industry-level pricing strategies. Furthermore, this approach should be coupled with the introduction of an additional specific tax, strategically crafted to accentuate the health-related benefits associated with the excise taxation on electronic cigarettes.

Potential impact of eliminating illicit trade in cigarettes: a demand-side perspective.

BACKGROUND: The Protocol to Eliminate Illicit Trade in Tobacco Products (the Protocol) entered into force in September 2018, and commits Parties to implement a package of measures to combat this global problem. The aim of this study is to assess the potential impact of eliminating illicit cigarettes on consumption, use and tax revenues. METHODS: We identified 36 countries where an independent (non-industry sponsored) study of the illicit cigarette market was available. We developed a conceptual framework for describing how the elimination of illicit cigarettes might impact on demand (consumption and use) and applied this framework to our sample of countries to assess the impact of eliminating illicit cigarettes across different settings. FINDINGS: Illicit cigarettes account on average for 11.2% of the market in these 36 countries. The elimination of illicit cigarettes would reduce total cigarette consumption by 1.9% across these countries. The decrease in 'group A' countries-where illicit cigarettes are >15% of the market-would average 4.1%. The smoking rate would decrease by 1.0% in relative terms including by 2.2% in group A countries. Tax revenues from the legal sale of cigarettes would increase by 11.2% including by 25.1% in group A countries. CONCLUSIONS: The illicit cigarette market reflects a complex interplay between supply and demand, with an array of different country conditions. Regardless of the situation, our study highlights the contribution that the elimination of illicit trade can make to tobacco control through demand reduction while at the same time generating significant tax revenues.

Revisiting the tax treatment of bidis in India.

BACKGROUND: Bidi use remains an intractable public health problem for India. This is partly due to the informal nature of the bidi supply chain, including tax exemptions for small producers. The aim of this paper is to assess the impact of making all bidis subject to duty and Goods and Services Tax. Although this may require legislative changes and incur some extra administrative costs, the net benefits would include greater oversight of the supply chain as well as increased tax revenues and reduced consumption. METHODS: We use a form of gap analysis (the difference between duty paid and total bidi consumption) to estimate the number of tax-exempt bidis. We then use local evidence on the price elasticity of demand for bidis to assess the impact of eliminating these exemptions on the price and consumption of presently tax-exempt bidis. FINDINGS: Total bidi consumption is estimated at 400 billion sticks per annum, including 275 billion duty paid sticks and 125 billion duty exempt sticks. Removing the small producer exemptions would increase the price of currently exempt bidis by INR4.6/pack. Total bidi consumption would decrease by 6% and the number of smokers would decrease by 2.2 million adults. This would bring the rate of bidi smoking down from 7.7% to 7.5%, while generating INR14.8 billion in tax revenues. CONCLUSIONS: Eliminating India's tax exemptions for small bidis producers would make a significant contribution to tobacco control, both directly by reducing the number of smokers and indirectly by plugging a loophole in the supply chain.

Modelling the expected impact of cigarette tax and price increases under Vietnam's excise tax law 2015-2020.

BACKGROUND: Vietnam's national tobacco control strategy aims to reduce the rate of smoking among male adults from 45% in 2015 to 39% by 2020. The aim of this paper is to assess what contribution cigarette tax increases under Vietnam's current excise tax plan can be expected to make to this target, and to discuss what additional measures might be implemented accordingly. METHODS: This study uses a mix of administrative datasets and predictive modelling techniques to assess the expected impact of tax and price increases on cigarette consumption, tobacco tax revenues and the rate of smoking between 2015 and 2020. FINDINGS: The average retail price of cigarettes is estimated to have increased by 16% (sensitivity analysis: 14%-18%) in inflation-adjusted terms between 2015 and 2020, while cigarette consumption is projected to decrease by 5.1% (4.5%-5.5%). The rate of smoking among males is projected to decrease to 42.8% (42.1%-43.6%) compared with the target of 39%. Total tax revenues from cigarettes are projected to increase by 21% (19%-23%), reflecting an extra ₫3300 billion in inflation-adjusted revenues for the government. CONCLUSION: The current excise tax law is expected to have only a modest impact on the rate of smoking in Vietnam, though it has generated tax revenues. If Vietnam is to achieve its tobacco control targets, the government should implement a mixed excise system with a high-specific component to promote public health by raising the price of cigarettes more significantly.

Estimating illicit cigarette consumption using a tax-gap approach, India.

OBJECTIVE: To estimate the magnitude of illicit cigarette consumption in India using a tax-gap approach. METHODS: In the tax-gap analysis, illicit cigarette consumption in India was defined as the difference between total and legal consumption. Data on total cigarette consumption came from two national Global Adult Tobacco Surveys carried out from 2009 to 2010 and from 2016 to 2017. Legal consumption was derived from Government of India data on domestic cigarette production and trade. FINDINGS: Estimated total cigarette consumption was 104.8 billion sticks in 2009 to 2010 and 94.2 billion sticks in 2016 to 2017, a decrease of 10.6 billion sticks, or of 10%, over the time period. Legal cigarette consumption fell from 99.4 to 88.5 billion sticks over the same period, a drop of 11%. Estimated illicit cigarette consumption was, therefore, 5.4 billion sticks in 2009 to 2010 and 5.6 billion sticks in 2016 to 2017, and accounted for 5.1% and 6.0% of the market in these periods, respectively. Consequently, only about 1 in 20 cigarettes consumed in India was illicit. Between 2016 and 2017, the estimated equivalent retail sales value of illicit cigarettes was 49 billion Indian rupees (753 million United States dollars, US$) and the estimated tax revenue foregone was 25 billion Indian rupees (US$ 390 million). CONCLUSION: Illicit cigarette consumption is relatively modest in India by global standards. Nonetheless, India should strengthen its capacity to control the illicit tobacco market as part of a comprehensive tobacco control strategy, while also continuing to implement traditional demand reduction measures, such as tobacco taxation.

Changes in the affordability of tobacco products in India during 2007/2008 to 2017/2018: a price-relative-to-income analysis.

BACKGROUND: Increasing the price of tobacco through taxation is a very effective means of reducing tobacco use. However, the impact of price increases can be diluted if consumer incomes are growing strongly. The affordability of tobacco products has, therefore, become an important indicator for tobacco control. This study asks whether tobacco products in India became more or less affordable during 2007/2008 to 2017/2018. METHODS: Survey data on the retail price of chewing tobacco, bidis and cigarettes were used to measure affordability at state and national levels. We adapted the price relative to income measure by calculating the percentage of net state domestic product (NSDP) per capita needed to purchase 1000 g of tobacco in each form and then calculating the average annual percentage change (AAPC) in affordability. We used ordinary least squares regression analysis to test for any changes. RESULTS: In 2017/2018, it took 1.72% and 1.18% of NSDP/capita to purchase 1000 g of tobacco in the form of bidis and chewing tobacco respectively. The affordability of bidis remained unchanged, while chewing tobacco became more affordable (AAPC = -1.83%, 95% confidence interval -2.87 to -0.80, P = 0.003). For cigarettes, it took 7.56% of NSDP/capita to purchase 1000 g of tobacco in 2017/2018; although affordability decreased in many states, national average affordability was unchanged. CONCLUSION: Tobacco products, especially indigenous forms such as bidis and chewing tobacco, have not become measurably less affordable over the past decade. India should raise taxes on all tobacco products to significantly reduce the affordability of these products and to promote public health.

Tobacco industry pricing undermines tobacco tax policy: A tale from Bangladesh.

The effectiveness of tax increase in reducing tobacco use depends on the extent to which the industry passes on the tax to consumers. Evidence suggests that tobacco industry may absorb or raise the price more than the tax increase depending on the price segment of tobacco products. In this paper, we examined the industry's pricing strategy by price segment of the cigarette market in Bangladesh by observing the deviation between the market retail prices (MRP) of cigarettes faced by consumers and government recommended retail prices (RRP) used as tax base in a four-tiered ad valorem tax structure. The RRPs by brands were collected from government sources. The MRPs by brands were collected by the International Tobacco Control Bangladesh Wave 3 Survey 2011-12 and Wave 4 Survey 2014-15. Applying linear regression to the deviation of MRP from RRP by price tiers, we found MRPs were higher than RRPs for higher-price brands allowing extra profit margin from the high end while lowering the relative price of and expanding demand for cheaper brands. Bangladesh cigarette industry adopted a differential pricing strategy that undermined the intended effect of tax policy change in reducing cigarette consumption and improving public health. This pricing strategy was supported by the tiered excise tax structure which should be replaced with a uniform specific excise system. In the face of growing cigarette affordability, it is crucial that the specific tax be increased routinely by an amount that induces cigarette price increases large enough to make cigarettes less affordable over time.

A decade of cigarette taxation in Bangladesh: lessons learnt for tobacco control.

Bangladesh has achieved a high share of tax in the price of cigarettes (greater than the 75% benchmark), but has not achieved the expected health benefits from reduction in cigarette consumption. In this paper we explore why cigarette taxation has not succeeded in reducing cigarette smoking in Bangladesh. Using government records over 2006-2017, we link trends in tax-paid cigarette sales to cigarette excise tax structure and changes in cigarette taxes and prices. We analysed data on smoking prevalence from Bangladesh Global Adult Tobacco Surveys to study consumption of different tobacco products in 2009 and 2017. Drawing on annual reports from tobacco manufacturers and other literature, we examine demand- and supply-side factors in the cigarette market. In addition to a growing affordability of cigarettes, three factors appear to have undermined the effectiveness of tax and price increases in reducing cigarette consumption in Bangladesh. First, the multitiered excise tax structure widened the price differential between brands and incentivized downward substitution by smokers from higher-price to lower-price cigarettes. Second, income growth and shifting preferences of smokers for better quality products encouraged upward substitution from hand-rolled local cigarettes (bidi) to machine-made low-price cigarettes. Third, the tobacco industry's market expansion and differential pricing strategy changed the relative price to keep low-price cigarettes inexpensive. A high tax share alone may prove inadequate as a barometer of effective tobacco taxation in lower-middle income countries, particularly where the tobacco tax structure is complex, tobacco products prices are relatively low, and the affordability of tobacco products is increasing.

Le Bangladesh applique un fort pourcentage de taxe sur les prix du tabac (au-delà du référent habituel de 75% du prix de détail) sans pour autant avoir atteint le bénéfice sanitaire attendu de réduction du tabagisme. Cet article se penche sur les raisons pour lesquelles la taxation du tabac n'est pas parvenue à réduire le tabagisme au Bangladesh. En utilisant les données gouvernementales couvrant la période comprise en 2006 et 2017, nous avons relié les tendances de vente des produits du tabac taxés avec la structure des droits d'accise sur le tabac et avec l'évolution des prix et des taxes sur le tabac. Nous avons analysé les données relatives à la prévalence du tabagisme à partir des enquêtes sur le tabagisme des adultes (GATS) réalisées en 2009 et 2017 au Bangladesh afin d'étudier la consommation des différents produits du tabac. À partir des rapports annuels des fabricants de tabac et d'autres ressources, nous avons examiné l'évolution du marché du tabac, côté demande et côté offre. Outre le fait que les cigarettes sont devenues plus abordables au fil du temps, trois facteurs semblent avoir sapé l'efficacité de l'augmentation des prix et des taxes dans l'objectif de réduction de la consommation de tabac au Bangladesh. Premièrement, la structure multi-niveau des droits d'accise sur le tabac a eu pour effet d'augmenter le différentiel de prix entre les marques, ce qui a poussé les consommateurs à opter pour des cigarettes moins chères. Deuxièmement, l'augmentation des revenus et le changement de préférence des consommateurs en faveur de produits de meilleure qualité ont fait que les consommateurs ont délaissé le tabac à rouler local (« bidi ¼) pour se tourner vers les cigarettes industrielles les moins chères. Troisièmement, du fait de l'expansion de ses marchés et de sa stratégie de différenciation des prix, l'industrie du tabac a fait évoluer les prix relatifs afin que les cigarettes les moins chères restent abordables. Un fort pourcentage de taxation peut s'avérer inapproprié, à lui seul, en tant que baromètre de l'efficacité des mesures de taxation du tabac dans les pays à revenu faible ou intermédiaire, notamment lorsque la structure de taxation du tabac est complexe, que les prix des produits du tabac sont relativement bas et qu'ils deviennent plus abordables au fil du temps.

Bangladesh ha alcanzado una elevada cuota de impuestos en el precio de los cigarrillos (superior al 75 % de referencia), pero no ha logrado los beneficios para la salud esperados de la reducción del consumo de cigarrillos. En este artículo exploramos por qué los impuestos sobre los cigarrillos no han logrado reducir el consumo de cigarrillos en Bangladesh. Utilizando los registros del gobierno entre 2006 y 2017, vinculamos las tendencias de las ventas de cigarrillos pagados con la estructura de los impuestos al consumo de cigarrillos y los cambios en los impuestos y precios de los cigarrillos. Se analizaron los datos sobre la prevalencia del tabaquismo de la Encuesta Mundial del Tabaco en Adultos de Bangladesh para estudiar el consumo de diferentes productos de tabaco en 2009 y 2017. Basándonos en los informes anuales de los fabricantes de tabaco y otras publicaciones, examinamos los factores de la demanda y la oferta en el mercado de cigarrillos. Además de la creciente asequibilidad de los cigarrillos, tres factores parecen haber socavado la eficacia de los aumentos de impuestos y precios en la reducción del consumo de cigarrillos en Bangladesh. En primer lugar, la estructura del impuesto especial de varios niveles amplió la diferencia de precios entre las marcas e incentivó la sustitución a la baja por parte de los fumadores, que pasaron de los cigarrillos de precio más alto a los de precio más bajo. En segundo lugar, el crecimiento de los ingresos y el cambio de las preferencias de los fumadores por productos de mejor calidad fomentaron la sustitución de los cigarrillos locales enrollados a mano (bidi) por cigarrillos de bajo precio hechos a máquina. Tercero, la expansión del mercado de la industria tabacalera y la estrategia de precios diferenciales cambiaron el precio relativo para mantener los cigarrillos de bajo precio baratos. Una elevada cuota de impuestos por sí sola puede resultar inadecuada como barómetro de los impuestos efectivos sobre el tabaco en los países de ingresos medios-bajos, en particular cuando la estructura de los impuestos sobre el tabaco es compleja, los precios de los productos del tabaco son relativamente bajos y la asequibilidad de los productos del tabaco está aumentando.

Estimated impact of the GST on tobacco products in India.

OBJECTIVE: To examine the potential impact of the goods and services tax (GST) on price, consumption and tax revenue from tobacco products in India and across states. METHODS: Data on prices, tax rates and tax revenue are used to estimate a benchmark scenario prior to the GST implementation in 2017-2018. Using own-price elasticity of demand for tobacco products, we estimate the impact of GST at the state level and the aggregate state-wise impact to obtain the national level impact. FINDINGS: We predict that the statutory GST rate of 28% plus compensation cess will increase the price of cigarettes, bidi and smokeless tobacco by 0.18%, 8.8% and 6%, respectively, and, as a result, it will reduce the weighted average consumption by 0.3%, 10% and 6% and increase tax revenue by 0.17%, 35% and 4.7%, respectively. Most states will experience a fall in tax revenue from tobacco products by more than 50% compared with the value-added tax revenue they collected pre-GST. The GST compensation cess will have to be used to compensate states' revenue shortfalls. CONCLUSIONS: The GST has increased the complexity of the tax system for tobacco products. In particular, for cigarettes, the specific cess constitutes the majority of tax revenue, and therefore, it must be revised regularly to protect revenue and keep real prices from falling. In addition, India should reintroduce excise taxation on all tobacco products, at least in part, on top of the GST, to make them less affordable and to smooth the transition after the expiration of the compensation cess.

Tobacco control and Healthy China 2030.

BACKGROUND: The Healthy China 2030 strategy sets ambitious targets for China's policy-makers, including a decrease in the smoking rate from 27.7% in 2015 to 20% by 2030. China has made progress on tobacco control in recent years, but many key measures remain underused. This study explores the potential for full implementation of these measures to achieve the targeted reduction in smoking by 2030. METHODS: First, a 'business as usual' scenario for China's cigarette market was developed based only on underlying economic parameters. Second, non-price tobacco control measures were then added assuming they are fully implemented by 2030. Third, excise per pack was raised to a level that would increase the real price of cigarettes by 50% in 2030. FINDINGS: Under the business as usual scenario, the rate of smoking falls to around 26.6% in 2030. When non-price measures are included, the rate of smoking falls to 22.0% (20.9%~23.1%). Thus, non-price measures alone are unlikely to achieve the Healthy China target. Under the third scenario, excise per pack was roughly doubled in 2030 in order to increase real cigarette prices by 50%. The rate of smoking then falls to 19.7% (18.2%~21.3%), reflecting 78 million (59~97 million) fewer smokers compared with 2016. In addition, real excise revenue from cigarettes increases by 21% (-3%~47%) compared with 2016. CONCLUSION: Significantly higher tobacco taxes will be needed to achieve Healthy China 2030 target for reduced smoking even after the implementation of other tobacco control measures.

Early assessment of China's 2015 tobacco tax increase.

In 2015, the Chinese government raised tobacco excise tax for the first time since 2009. Changing from previous practice, the State Tobacco Monopoly Administration raised its cigarette prices at the same time. We assessed the early impact of the 2015 tax increase on cigarette prices, sales volumes, tax revenue generation and the potential effect on prevalence of smoking in China. Between 2014 and 2016, the retail price of cigarettes increased on average by 11%, with the cheapest category of cigarette brands increasing by 20%. The average proportion of tax in the price of cigarettes rose from 51.7% to 55.7%. Annual cigarette sales decreased by 7.8%, from 127 to 117 billion packs. The increase in cigarette prices could be associated with a 0.2% to 0.6% decrease in the proportion of adults smoking, representing between 2.2 and 6.5 million fewer smokers. Tax revenues from cigarettes increased by 14%, from 740 to 842 billion Chinese yuan between 2014 and 2016, reflecting an extra 101 billion Chinese yuan in tax revenues for the government. The 2015 tax increase shows that tobacco taxation can provide measurable benefits to both public health and finance in China. The experience also highlights the potential for tobacco taxation to contribute to China's broader development targets, including the sustainable development goals and Healthy China 2030. Looking forward, this link to development can be facilitated through multisectoral research and dialogue to develop consistent cross-sectoral objectives for tobacco tax policy design and implementation.

En 2015, le gouvernement chinois a augmenté la fiscalité sur le tabac pour la première fois depuis 2009. Contrairement aux pratiques passées, l'Administration du monopole d'État sur le tabac a décidé d'augmenter en même temps les prix des cigarettes. Nous avons évalué les premiers impacts de la hausse de 2015 des taxes sur le tabac, les volumes vendus, les recettes fiscales qui en ont découlé et l'effet potentiel de cette mesure sur la prévalence du tabagisme en Chine. Entre 2014 et 2016, le prix de vente au détail des cigarettes a augmenté de 11% en moyenne, avec une augmentation de 20% pour les marques les moins chères. La proportion moyenne des taxes sur le prix des cigarettes est passée de 51,7% à 55,7%. Les ventes annuelles de cigarettes ont baissé de 7,8%, passant de 127 à 117 milliards de paquets. L'augmentation des prix des cigarettes pourrait être associée à une réduction comprise entre 0,2% et 0,6% de la proportion de fumeurs dans la population adulte, ce qui représente entre 2,2 et 6,5 millions de fumeurs en moins. Les recettes fiscales obtenues sur la vente de cigarettes ont augmenté de 14% (740 milliards de yuans en 2014 contre 842 milliards en 2016), apportant ainsi au gouvernement 101 milliards de yuans de recettes fiscales supplémentaires. La hausse de la fiscalité opérée en 2015 en Chine montre que la taxation du tabac peut avoir des bénéfices appréciables à la fois sur la santé publique et sur les finances publiques. Cette expérience révèle aussi le potentiel de la taxation du tabac dans la poursuite des objectifs plus larges de développement de la Chine, notamment des objectifs de développement durable et des objectifs du programme «Healthy China 2030¼ (une Chine saine en 2030). À l'avenir, ce lien avec les objectifs de développement pourrait être optimisé par des recherches et un dialogue multisectoriels visant à définir des objectifs intersectoriels cohérents pour l'élaboration et l'application des politiques fiscales sur le tabac.

En 2015, el gobierno chino subió el impuesto especial sobre el tabaco por primera vez desde 2009. De manera distinta a la práctica anterior, la Administración Estatal de Monopolio de Tabaco subió los precios de los cigarrillos al mismo tiempo. Se evalúa el impacto inicial de la subida de impuestos de 2015 sobre los precios de los cigarrillos, los volúmenes de venta, la generación de ingresos tributarios y el posible efecto sobre la prevalencia del tabaco en China. Entre 2014 y 2016, el precio minorista de los cigarrillos subió de media un 11 % y la categoría más barata de marcas de cigarrillos subió en un 20 %. La proporción media de impuestos en el precio de los cigarrillos subió del 51,7 % al 55,7 %. Las ventas anuales de cigarrillos cayeron un 7,8 %, de 127 000 a 117 000 millones de paquetes. La subida de los precios de los cigarrillos podría estar asociada con una reducción del 0,2 % al 0,6 % en la proporción de fumadores adultos, lo que representa entre 2,2 y 6,5 millones de fumadores menos. Los ingresos fiscales procedentes de los cigarrillos aumentaron un 14%, de 740 000 a 842 000 millones de yuanes chinos entre 2014 y 2016, lo que se refleja un aumento de 101 000 millones de yuanes chinos en ingresos fiscales para el gobierno. La subida tributaria de 2015 muestra que el impuesto sobre el tabaco puede brindar unos beneficios considerables tanto para la salud pública como para las finanzas en China. Los ingresos tributarios de los cigarrillos subieron un 14 %, de 740 000 a 842 000 millones de yuanes chinos entre 2014 y 2016, lo que equivale a 15 000 millones adicionales de dólares estadounidenses en ingresos fiscales para el gobierno. La subida de los impuestos sobre el tabaco en China en 2015 supone una demostración de que los impuestos sobre el tabaco podrían generar beneficios cuantificables tanto para la salud pública como para las finanzas. La experiencia también destaca el potencial de los impuestos sobre el tabaco de contribuir a los objetivos de desarrollo más amplios de China, incluidos los objetivos de desarrollo sostenible y salud de China para 2030. De cara al futuro, este vínculo con el desarrollo puede facilitarse a través de la investigación y el diálogo multisectoriales para desarrollar objetivos intersectoriales coherentes para el diseño y la implementación de la política tributaria del tabaco.

Cost-effectiveness of a smokeless tobacco control mass media campaign in India.

BACKGROUND: Tobacco control mass media campaigns are cost-effective in reducing tobacco consumption in high-income countries, but similar evidence from low-income countries is limited. An evaluation of a 2009 smokeless tobacco control mass media campaign in India provided an opportunity to test its cost-effectiveness. METHODS: Campaign evaluation data from a nationally representative household survey of 2898 smokeless tobacco users were compared with campaign costs in a standard cost-effectiveness methodology. Costs and effects of the Surgeon campaign were compared with the status quo to calculate the cost per campaign-attributable benefit, including quit attempts, permanent quits and tobacco-related deaths averted. Sensitivity analyses at varied CIs and tobacco-related mortality risk were conducted. RESULTS: The Surgeon campaign was found to be highly cost-effective. It successfully generated 17 259 148 additional quit attempts, 431 479 permanent quits and 120 814 deaths averted. The cost per benefit was US$0.06 per quit attempt, US$2.6 per permanent quit and US$9.2 per death averted. The campaign continued to be cost-effective in sensitivity analyses. CONCLUSION: This study suggests that tobacco control mass media campaigns can be cost-effective and economically justified in low-income and middle-income countries. It holds significant policy implications, calling for sustained investment in evidence-based mass media campaigns as part of a comprehensive tobacco control strategy.

Global economic cost of smoking-attributable diseases.

BACKGROUND: The detrimental impact of smoking on health has been widely documented since the 1960s. Numerous studies have also quantified the economic cost that smoking imposes on society. However, these studies have mostly been in high income countries, with limited documentation from developing countries. The aim of this paper is to measure the economic cost of smoking-attributable diseases in countries throughout the world, including in low- and middle-income settings. METHODS: The Cost of Illness approach is used to estimate the economic cost of smoking attributable-diseases in 2012. Under this approach, economic costs are defined as either 'direct costs' such as hospital fees or 'indirect costs' representing the productivity loss from morbidity and mortality. The same method was applied to 152 countries, which had all the necessary data, representing 97% of the world's smokers. FINDINGS: The amount of healthcare expenditure due to smoking-attributable diseases totalled purchasing power parity (PPP) $467 billion (US$422 billion) in 2012, or 5.7% of global health expenditure. The total economic cost of smoking (from health expenditures and productivity losses together) totalled PPP $1852 billion (US$1436 billion) in 2012, equivalent in magnitude to 1.8% of the world's annual gross domestic product (GDP). Almost 40% of this cost occurred in developing countries, highlighting the substantial burden these countries suffer. CONCLUSIONS: Smoking imposes a heavy economic burden throughout the world, particularly in Europe and North America, where the tobacco epidemic is most advanced. These findings highlight the urgent need for countries to implement stronger tobacco control measures to address these costs.

Generating revenue by raising tobacco taxes in Latin America and the Caribbean / Generar ingresos al aumen¬tar los impuestos al tabaco en América Latina y el Caribe / Geração de receita com o aumento dos impostos dos cigarros na América Latina e no Caribe

[ABSTRACT]. Objective. The objective of this study was to determine if raising tobacco taxes in the Latin America and Caribbean (LAC) region will generate extra tax revenue, even at outer edges of the sensitivity analysis, with relatively high price elasticities of demand for cigarettes. Methods. A model of the cigarette market in 31 LAC countries was developed using cigarette tax, price, and retail sales data for 2014. It was then assumed that all countries increased the excise tax by 50% per pack. The model incorporated 12 studies from the LAC region that estimate the price elasticity of demand for cigarettes to quantify the expected impact of this tax increase on sales and tax revenues. Results. The tax increase would raise cigarette prices by an average of 28% across the region. The volume of cigarette sales would decrease by 7% (confidence interval (CI): 3–11). Cigarette tax revenue would increase by 32% (CI: 27–37), representing an extra US$ 7 050 million (CI: 5 984–8 086) in revenue. Almost all countries showed increases in tax revenue, even at outer edges of the sensitivity analysis. Conclusions. These findings confirm that the expected benefits of raising tobacco taxes are robust across the LAC region. Countries in the region should have confidence that raising tobacco tax rates will generate extra tax revenues.

[RESUMEN]. Objetivo. El objetivo de este estudio fue determinar si aumentar los impuestos al tabaco en América Latina y el Caribe generaría ingresos fiscales adicionales, incluso por fuera del extremo superior del análisis de sensibilidad, con una elasticidad relativamente alta de la demanda de cigarrillos con respecto al precio. Métodos. Se elaboró un modelo del mercado del cigarrillo en 31 países de América Latina y el Caribe utilizando datos sobre impuestos, precio y ventas minoristas de cigarrillos correspondientes al 2014. Luego se adoptó el supuesto de que todos los países aumentaban el impuesto al consumo de tabaco un 50% por paquete. El modelo incorporó 12 estudios de América Latina y el Caribe que estimaron la elasticidad de la demanda de cigarrillos con respecto al precio para cuantificar la repercusión prevista de este aumento de impuestos sobre las ventas y los ingresos fiscales. Resultados. El aumento de los impuestos aumentaría el precio de los cigarrillos un 28% promedio en toda esta región. El volumen de la venta de cigarrillos disminuiría alrededor de 7% (intervalo de confianza [IC]: 3–11). Los ingresos derivados del impuesto a los cigarrillos aumentarían en 32% (IC: 27–37), lo que supondría ingresos adicionales por US$ 7 050 millones (IC: 5 984–8 086). En casi todos los países se observe un aumento de los ingresos fiscales, incluso por fuera del extremo superior del análisis de sensibilidad. Conclusiones. Estos resultados confirman que los beneficios previstos del aumento de los impuestos al tabaco son sólidos en toda América Latina y el Caribe. Los países de esta región deben confiar en que el aumento de las tasas impositivas al tabaco generará ingresos fiscales adicionales.

[RESUMO]. Objetivo. Determinar se o aumento dos impostos que incidem sobre os cigarros na Região da América Latina e Caribe (ALC) gera receita tributária adicional, mesmo nas extremidades da análise de sensibilidade, com elasticidade do preço relativamente alta na demanda por cigarros. Métodos. Um modelo do mercado de cigarros em 31 países da ALC foi desenvolvido com a inclusão de dados sobre imposto, preço e vendas a varejo de cigarros em 2014. Pressupôs-se que todos os países efetuaram um aumento do imposto especial de consume em 50% por maço de cigarro. O modelo se baseou em 12 estudos da Região da ALC que estimaram a elasticidade do preço na demanda por cigarros para quantificar o impacto esperado do aumento do imposto na receita tributária e das vendas. Resultados. O aumento do imposto resultaria em um aumento médio no preço dos cigarros de 28% em toda a Região. O volume de vendas de cigarros sofreria uma queda de 7% (intervalo de confiança (IC): 3–11). A receita do imposto dos cigarros teria um aumento de 32% (IC: 27–37), representando um adicional de US$ 7,05 bilhões (IC: 5,984–8,086) na receita. Quase todos os países demonstraram aumento na receita tributária, até mesmo nas extremidades da análise de sensibilidade. Conclusão. Os resultados deste estudo confirmam que os benefícios esperados com o aumento dos impostos dos cigarros são consideráveis em toda a Região da ALC. Os países podem ter confiança de que aumentar as taxas tributárias dos cigarros gera receita tributária adicional.

Generating revenue by raising tobacco taxes in Latin America and the Caribbean.

OBJECTIVE: The objective of this study was to determine if raising tobacco taxes in the Latin America and Caribbean (LAC) region will generate extra tax revenue, even at outer edges of the sensitivity analysis, with relatively high price elasticities of demand for cigarettes. METHODS: A model of the cigarette market in 31 LAC countries was developed using cigarette tax, price, and retail sales data for 2014. It was then assumed that all countries increased the excise tax by 50% per pack. The model incorporated 12 studies from the LAC region that estimate the price elasticity of demand for cigarettes to quantify the expected impact of this tax increase on sales and tax revenues. RESULTS: The tax increase would raise cigarette prices by an average of 28% across the region. The volume of cigarette sales would decrease by 7% (confidence interval (CI): 3-11). Cigarette tax revenue would increase by 32% (CI: 27-37), representing an extra US$ 7 050 million (CI: 5 984-8 086) in revenue. Almost all countries showed increases in tax revenue, even at outer edges of the sensitivity analysis. CONCLUSIONS: These findings confirm that the expected benefits of raising tobacco taxes are robust across the LAC region. Countries in the region should have confidence that raising tobacco tax rates will generate extra tax revenues.

Generating revenue by raising tobacco taxes in Latin America and the Caribbean / Generar ingresos al aumentar los impuestos al tabaco en América Latina y el Caribe / Geração de receita com o aumento dos impostos dos cigarros na América Latina e no Caribe

ABSTRACT Objective The objective of this study was to determine if raising tobacco taxes in the Latin America and Caribbean (LAC) region will generate extra tax revenue, even at outer edges of the sensitivity analysis, with relatively high price elasticities of demand for cigarettes. Methods A model of the cigarette market in 31 LAC countries was developed using cigarette tax, price, and retail sales data for 2014. It was then assumed that all countries increased the excise tax by 50% per pack. The model incorporated 12 studies from the LAC region that estimate the price elasticity of demand for cigarettes to quantify the expected impact of this tax increase on sales and tax revenues. Results The tax increase would raise cigarette prices by an average of 28% across the region. The volume of cigarette sales would decrease by 7% (confidence interval (CI): 3-11). Cigarette tax revenue would increase by 32% (CI: 27-37), representing an extra US$ 7 050 million (CI: 5 984-8 086) in revenue. Almost all countries showed increases in tax revenue, even at outer edges of the sensitivity analysis. Conclusions These findings confirm that the expected benefits of raising tobacco taxes are robust across the LAC region. Countries in the region should have confidence that raising tobacco tax rates will generate extra tax revenues.

RESUMEN Objetivo El objetivo de este estudio fue determinar si aumentar los impuestos al tabaco en América Latina y el Caribe generaría ingresos fiscales adicionales, incluso por fuera del extremo superior del análisis de sensibilidad, con una elasticidad relativamente alta de la demanda de cigarrillos con respecto al precio. Métodos Se elaboró un modelo del mercado del cigarrillo en 31 países de América Latina y el Caribe utilizando datos sobre impuestos, precio y ventas minoristas de cigarrillos correspondientes al 2014. Luego se adoptó el supuesto de que todos los países aumentaban el impuesto al consumo de tabaco un 50% por paquete. El modelo incorporó 12 estudios de América Latina y el Caribe que estimaron la elasticidad de la demanda de cigarrillos con respecto al precio para cuantificar la repercusión prevista de este aumento de impuestos sobre las ventas y los ingresos fiscales. Resultados El aumento de los impuestos aumentaría el precio de los cigarrillos un 28% promedio en toda esta región. El volumen de la venta de cigarrillos disminuiría alrededor de 7% (intervalo de confianza [IC]: 3-11). Los ingresos derivados del impuesto a los cigarrillos aumentarían en 32% (IC: 27-37), lo que supondría ingresos adicionales por US$ 7 050 millones (IC: 5 984-8 086). En casi todos los países se observó un aumento de los ingresos fiscales, incluso por fuera del extremo superior del análisis de sensibilidad. Conclusiones Estos resultados confirman que los beneficios previstos del aumento de los impuestos al tabaco son sólidos en toda América Latina y el Caribe. Los países de esta región deben confiar en que el aumento de las tasas impositivas al tabaco generará ingresos fiscales adicionales.

RESUMO Objetivo Determinar se o aumento dos impostos que incidem sobre os cigarros na Região da América Latina e Caribe (ALC) gera receita tributária adicional, mesmo nas extremidades da análise de sensibilidade, com elasticidade do preço relativamente alta na demanda por cigarros. Métodos Um modelo do mercado de cigarros em 31 países da ALC foi desenvolvido com a inclusão de dados sobre imposto, preço e vendas a varejo de cigarros em 2014. Pressupôs-se que todos os países efetuaram um aumento do imposto especial de consumo em 50% por maço de cigarro. O modelo se baseou em 12 estudos da Região da ALC que estimaram a elasticidade do preço na demanda por cigarros para quantificar o impacto esperado do aumento do imposto na receita tributária e das vendas. Resultados O aumento do imposto resultaria em um aumento médio no preço dos cigarros de 28% em toda a Região. O volume de vendas de cigarros sofreria uma queda de 7% (intervalo de confiança (IC): 3-11). A receita do imposto dos cigarros teria um aumento de 32% (IC: 27-37), representando um adicional de US$ 7,05 bilhões (IC: 5,984-8,086) na receita. Quase todos os países demonstraram aumento na receita tributária, até mesmo nas extremidades da análise de sensibilidade. Conclusão Os resultados deste estudo confirmam que os benefícios esperados com o aumento dos impostos dos cigarros são consideráveis em toda a Região da ALC. Os países podem ter confiança de que aumentar as taxas tributárias dos cigarros gera receita tributária adicional.