The Framework Convention Alliance for Tobacco Control

Ecuador leading Latin America in tobacco taxation

Young people in Ecuador release blue balloons to symbolise clean air at the launch of the Ecuador Breathes Better campaign earlier this year. (c) FES

 Ecuador has become a Latin American leader in tobacco taxation after increasing taxes on 24 November.

Increasing the price of tobacco products is recognised as the most effective way to cut consumption.

The increase is in the form of a specific tax of US$0.08 on each cigarette unit, applied to all brands and packaging, which translates to an average increase of 20 per cent in the final price.

According to Rocio Vaca Bucheli, President and Executive Director of the Ecuadorian Foundation for Respiratory Health (FESAR)-Anti Tobacco Alliance, in Quito, the tax share of tobacco is now 77.4 per cent, up from 64 per cent in 2010.

“This is a real milestone for the Region of the Americas and the world. The new tax meets some of the most advanced recommendations in tobacco fiscal policy: it is adjustable every six months according to the consumer price index, which maintains the value against the final price, and other prices in the economy,” said Rocio.

“And it is specific, a fixed amount for all brands and packaging, which reduces the incentive for tobacco corporations to lower the prices of some brands, one of the industry's strategies to recruit new consumers,” he added.
 

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