Tobacco Taxation Incidence: Evidence From The Russian Federation

Tarlovsky, Alan Fuchs; Matytsin, Mikhail; Обухова, О. О.

doi:10.1596/1813-9450-8626

Cited by 4 publications

(6 citation statements)

References 8 publications

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“…Denisova and Kuznetsova (2014) and Verguet et al (2015) find that, across the population and, specifically, among low-income groups, the future benefits of nonsmoking outweigh the losses attributed to tobacco taxes. Other country-specific studies based on household microdata find that the distributional incidence of raising taxes on tobacco can be progressive, most often because of the benefits derived from averted medical expenses Fuchs, Del Carmen, and Genoni 2018;Fuchs, Del Carmen, and Mukong 2018;Fuchs, and Matytsin 2018;Fuchs and Meneses 2017a, 2017bFuchs, Orlic, and Cancho 2019).…”

Section: Tobacco Taxationmentioning

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: Tobacco Taxationmentioning

confidence: 99%

“…The World Bank has published country-specific studies on the distributional incidence of tobacco taxation (seeFuchs, Del Carmen, and Genoni 2018;Fuchs, Del Carmen, and Mukong 2018;Fuchs and Matytsin 2018;Fuchs and Meneses 2017a, 2017bFuchs, Orlic, and Cancho 2019). However, these studies rely on country-specific data sources with some methodological variation.…”

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Distributional Effects of Tobacco Taxation: A Comparative Analysis

Fuchs¹,

Icaza²,

Paz³

2019

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“… 79 In Chile, Ukraine, and Russia, reducing medical expenses constitutes the largest long-term benefit of the tobacco price increase under the ECBA. 78 80 81 Similarly, tobacco price increases have positive welfare gains from being able to work longer. In Bangladesh, for instance, the main gains of taxing tobacco under the ECBA model arise from extending peoples’ working lives (ie, lowering YWLLs).…”

Section: Challenges From the Industrymentioning

confidence: 99%

Taxation of tobacco, alcohol, and sugar-sweetened beverages: reviewing the evidence and dispelling the myths

Paraje,

Jha,

Savedoff

et al. 2023

BMJ Glob Health

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The article reviews the large body of evidence on how taxation affects the consumption of tobacco, alcohol, and sugar-sweetened beverages (SSB). There is abundant evidence that demand for tobacco, alcohol, and SSB is price-responsive and that tax changes are quickly passed on to consumers. This suggests that taxes can be highly effective in changing consumption and reducing the burden of diseases associated with consuming these products. Tobacco, alcohol, and SSB industries oppose taxation on similar grounds, mostly on the regressivity of taxes since regressive taxes take a larger percentage of income from low income earners than from middle and high income earners; but also on the effects taxes might have on employment and economic activity; and, in the case of tobacco, the effects taxation has on illicit trade.Contrary to industry arguments, evidence shows that taxation may have short-term negative financial consequences for low-income households. However, medium and long-term financial benefits from reduced healthcare costs, better health, and welfare largely compensate for such consequences. Moreover, taxation does not negatively affect aggregate economic activity or employment, as consumers switch demand to other products that generate employment and may compensate for any employment loss in taxed sectors. Evidence also shows the revenues generated are generally spent on labour-intensive services. In the case of illicit trade in tobacco, evidence shows that illicit trade has not increased globally (rather the opposite) despite increases in tobacco taxes. Profit-maximising smugglers increase illicit cigarette prices along with the increases in licit cigarette prices. This implies that even when increased taxes divert some demand to the illicit market, they push prices up in the illicit market, discouraging consumption.

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“…The ECBA methodology has been adapted and applied to a variety of empirical studies by the World Bank in low-, middle-, and higher-income countries. Evidence from Bangladesh, Bosnia and Herzegovina, Chile, Indonesia, Moldova, the Russian Federation, South Africa, and Ukraine have consistently dismissed the arguments of regressive effects of increasing taxes on tobacco (see Fuchs, Del Carmen, and Mukong 2018;Fuchs and Matytsin 2018;Fuchs and Meneses 2017a, 2017bFuchs, Orlic, and Cancho 2019). Findings across these countries suggest that increasing taxes on tobacco is non- The literature has generally estimated the price elasticity of demand for cigarettes among adults at between -0.3 and -0.8 (CBO 2012;Chaloupka and Warner 2000;Gallet and List 2003;IARC 2011).…”

mentioning

confidence: 99%

“…This has been shown in recent estimations based on household survey data from a variety of countries, including Bangladesh, Bosnia and Herzegovina, Chile, Indonesia, Moldova, Russia, and Ukraine. Fuchs, Del Carmen, and Mukong 2018;Fuchs and Matytsin 2018;Fuchs and Meneses 2017a, 2017bFuchs, Orlic, and Cancho 2019). 9…”

mentioning

confidence: 99%

The Welfare and Distributional Effects of Increasing Taxes on Tobacco in Vietnam

Tarlovsky¹,

Icaza²

2019

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Tobacco Taxation Incidence: Evidence From The Russian Federation

Cited by 4 publications

References 8 publications

Distributional Effects of Tobacco Taxation: A Comparative Analysis

Distributional Effects of Tobacco Taxation: A Comparative Analysis

Taxation of tobacco, alcohol, and sugar-sweetened beverages: reviewing the evidence and dispelling the myths

The Welfare and Distributional Effects of Increasing Taxes on Tobacco in Vietnam

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