WHO currently recommends that countries increase the excise tax rate for tobacco to 75 percent (WHO 2015). 1 High excise taxes on tobacco products, however, continue to be underused in LMICs, despite the high-and in many cases rising-prevalence of smoking. Introducing or increasing taxes on tobacco items has raised concerns about the impact of such increases on low-income consumers (i.e. the distributional impact). Indeed, perceived regressivity of tobacco taxation has been used as one of the main arguments against tax increases. However, looking beyond the immediate fiscal incidence of higher taxes and applying a broader definition of welfare, recent studies show that tobacco tax can be both progressive and socially desirable. Driven by the empirical assumption that the poor are more responsive to price changes, results suggest that increasing excise taxes on tobacco can be a pro-poor instrument, with health and health-related financial benefits accruing to the bottom 40 percent of the population (Denisova and Kuznetsova 2014, Fuchs and
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.