Tobacco Tax Reform at the Crossroads of Health and Development

Marquez, Patricio V.; Moreno-Dodson, Blanca

doi:10.1596/28494

Cited by 32 publications

(42 citation statements)

References 71 publications

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“…Nonetheless, by discouraging consumption, taxes reduce adverse tobacco-related health outcomes, as well as the associated medical and human capital costs to households and societies. Medical treatment of tobacco-related chronic diseases swells annual health care costs among public health care systems and households (Marquez and Moreno-Dodson 2017). Smoking reduces household earnings potential and labor productivity, negatively affecting human capital accumulation and development (WHO 2015b).…”

Section: Modelmentioning

confidence: 99%

“…Tobacco taxes could unleash economy-wide reactions with potentially large impacts that are difficult to predict. For example, reductions in employment and production in the tobacco industry have been a concern in some local contexts following cigarette tax reforms (Marquez and Moreno-Dodson 2017). More accurate data and additional research should address these indirect effects and general equilibrium interactions.…”

Section: Page 23mentioning

confidence: 99%

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Distributional Effects of Tobacco Taxation: A Comparative Analysis

Fuchs¹,

Icaza²,

Paz³

2019

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Tobacco taxes have positive impacts on health outcomes. However, policy makers often hesitate to use them because of the perception that poorer households are affected disproportionally more than richer households. This study compares the simulated distributional effects of tobacco tax increases in eight low-and middle-income countries. It applies a standardized extended cost-benefit analysis methodology and relies on comparable data sources across countries. The net effect of raising taxes on cigarettes encompasses the direct negative price shock to household budgets and the long-term benefits of improved health outcomes. The distributional incidence is assessed by estimating decile-specific behavioral responses and relative income gains. The comparative results do not support the claim that tobacco taxes are necessarily regressive. Although welfare losses from the first-order price shock disproportionally affect the poor, these negative shocks are attenuated by greater price-responsiveness among lower-income groups and further offset by higher long-term relative gains through reduced medical expenditures and additional years of productive life as taxes dissuade smoking. In several countries, increasing the price of cigarettes is pro-poor and welfare improving for a large share of the population. Along with raising taxes, policy should aim at encouraging responsiveness to price changes and target tobacco-related medical expenses that disproportionally burden the poor.

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Section: Modelmentioning

confidence: 99%

Section: Page 23mentioning

confidence: 99%

Distributional Effects of Tobacco Taxation: A Comparative Analysis

Fuchs¹,

Icaza²,

Paz³

2019

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“…A growing number of countries have achieved success with a tobacco tax strategy of "Go big, go fast": large, rapid increases in tobacco tax rates, joined to impact-boosting measures including the swift merger of tax tiers. Together, these actions can permanently change consumers' expectations about how much smoking costs and durably alter their behavior (Marquez and Moreno-Dodson, 2017). This is a promising path for tobacco control in Indonesia.…”

Section: // Executive Summarymentioning

confidence: 99%

Cigarette Affordability in Indonesia

Zheng¹,

Marquez²,

Ahsan³

et al. 2018

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Why Affordability? Cigarette affordability analysis is an important input to guide tobacco control policy, in particular tobacco taxation. Global evidence shows that when cigarettes are made substantially less affordable for consumers, many people will quit or reduce smoking, despite the addictive power of nicotine, while many who would have smoked will never start. This study investigates trends in cigarette affordability in Indonesia from 2002 to 2017. Affordability analysis is critical for Indonesia today, because the government has accelerated tobacco control measures, notably by raising the country's cigarette excise tax six times between 2011 and 2017. Affordability is key to understanding these measures' successes and shortfalls, and to honing future strategies that can build on the momentum achieved. Background: Indonesia's Tobacco Epidemic Health impacts. Estimated at 68.1 percent in 2016, Indonesia's male smoking prevalence is among the highest in the world. The country's five leading causes of death are all tobaccorelated, including ischemic heart disease, cerebrovascular disease, tuberculosis, diabetes, and chronic respiratory diseases (IHME, 2017). Morbidity from smoking-related diseases accounts for more than 21 percent of all cases of chronic disease in Indonesia. Economic damage. Along with its health impacts, tobacco consumption imposes a heavy economic burden, primarily on Indonesia's poor, who risk lost income, reduced labor productivity, and deeper impoverishment from out-of-pocket payments for the treatment of tobacco-related diseases. While the poor suffer most, all of Indonesian society is affected by the tobacco epidemic. Tobacco-related diseases increasingly burden the country's national health insurance program. Indonesia's smoking-attributable health expenditure is estimated at some US$ 1.2 billion per year (Barber et al., 2008; Goodchild et al., 2017), equivalent to about 8 percent of Indonesia's total public expenditure on health (World Bank, 2016). Direct and indirect costs of tobacco-related disease divert resources needed for Indonesia's development-posing a growing challenge to the country. Harm to children. In 2013, 56 percent of Indonesian children aged 0-4 years were exposed to secondhand smoke in their homes (IAKMI, 2014). Paternal smoking predicts an increased probability of short-term and chronic malnutrition among Indonesian children

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“…The two major types of special taxes that countries impose on tobacco are specific (quantity-based) and ad valorem (value-based) excise taxes. While both schemes have strengths and drawbacks, the literature and international experiences suggest that a specific excise tax is often "technically superior" (Marquez and Moreno-Dodson 2017). Implementing a specific excise can lower administrative burdens, the risks of noncompliance, and the incentives for the tobacco industry to keep consumer prices low (Ibidem).…”

Section: Heterogenous Effect Of Increasing the Specific Excisementioning

confidence: 99%

Taxing Tobacco in Georgia: Welfare and Distributional Gains of Smoking Cessation

Tarlovsky¹,

Icaza²

2020

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Tobacco Tax Reform at the Crossroads of Health and Development

Abstract: BackgroundThree Key Messages for the Individual Cigarette Smoker in the 21st Century

Cited by 32 publications

References 71 publications

Distributional Effects of Tobacco Taxation: A Comparative Analysis

Distributional Effects of Tobacco Taxation: A Comparative Analysis

Cigarette Affordability in Indonesia

Taxing Tobacco in Georgia: Welfare and Distributional Gains of Smoking Cessation

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