In 2018, only 38 countries, covering 14% of the world’s population, had sufficiently high tobacco taxes – meaning that at least 70% of the cost of these unhealthy products is taxed. By implementing proven policies like tobacco taxes, the costs that the tobacco industry creates for local communities and the nation can be avoided. It is a benefit to population health, revenue, and development.
How Gambia reduced cigarette imports with taxes by over 60%
In 2012, the Gambia cigarette prices were among the lowest in the African region. With the support of WHO, the country made a plan to increase the price of cigarettes. It worked so well that the country implemented an even more ambitious plan to increase the tobacco tax in the years that followed. As a result, sales in 2018 were almost three times higher than in 2011. In the meantime, cigarette imports have been reduced by over 60%.
“The results of these plans have exceeded our expectations,” said Mambury Njie, Honorable Minister of Finance and Economy in The Gambia. He said this convinced the country that raising tobacco taxes was a win-win to generate more revenue while reducing demand.
“I hope that our experience in The Gambia will encourage other countries to embark on their own reforms, especially in this COVID-19 pandemic where the need to mobilize domestic resources that includes health is paramount” , he said.
Sri Lanka uses a special excise tax to reduce cigarette consumption
Sri Lanka now proudly meets the recommended minimum taxation requirements for cigarettes. Taxes reach 77% of the top selling brand’s price. In accordance with best practices in the WHO Tobacco Taxation Guide, Sri Lanka primarily relies on a specific excise tax, that is, a tax levied on selected products based on the quantity such as the number of cigarettes or the weight of the tobacco.
Taxes have been increased at regular intervals to effectively reduce the affordability and consumption of these deadly products.
“We are confident that following the best practices outlined in the manual will help us address these upcoming challenges and improve the health of the Sri Lankan people,” said Nimal Siripala de Silva, Minister of Health of Sri Lanka.
The increase in taxation on cigarettes in Colombia leads to a 34% decrease in cigarette consumption
In 2016, Colombia had the second cheapest cigarettes in the western hemisphere after Paraguay (a large manufacturer with notoriously low prices).
As part of a broader tax 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 real increase of 4% per year after 2019. The reform was a Win-win-win for Colombia.
Not only did cigarette consumption decline by 34% by 2018, excise tax revenues, which are earmarked to finance general health insurance (UHC), have almost doubled.
Hence, the tobacco tax reform reduced tobacco use (along with associated deaths, illnesses and costs). higher earnings; and contributed to the financial sustainability of the UHC system. A win-win-win situation.
“When thinking about how to save lives, taxes are usually not the first tool that comes to mind. However, increasing taxes on harmful products like tobacco is a very effective and proven way of reducing the consumption of harmful products and the associated costs of death, illness and health care, ”said Colombian economist Mauricio Santamaría.
“Sin Tax” expands health insurance in the Philippines
New taxes on tobacco and alcohol enable the poorest and most vulnerable Filipinos to receive health services.