The Framework Convention Alliance for Tobacco Control

Fact Sheets

Taxation and price: types of taxes

Excise tax is a tax on selected goods which are consumed within a country. Tax can be collected from the producer, manufacturer, wholesaler, importer, or at the point of final sale to the consumer. Excise taxes can be either specific or ad valorem.

Specific excise taxes are charged per quantity, such as per cigarette, pack, or kilogram (e.g $1.50 per pack regardless of price). Ad valorem excise taxes are charged as a percentage of the value of the product. The value of the product is measured by the manufacturer’s price (e.g., 80% of the manufacturer’s price) or by the price paid by consumers (e.g 70% of pre-tax retail price).

Download: the FCA and Campain for Tobacco-free Kids fact sheet for more information (313KB)

Taxation and price: countering industry claims

All of the following claims are not true. This fact sheet explains why.

  • Higher tobacco taxes will hurt the economy.
  • Higher tobacco taxes will reduce tax revenues.
  • Higher tobacco taxes will increase smuggling.
  • Higher tobacco taxes will hurt the poor.
  • Higher cigarette taxes will encourage smokers to switch to cheaper cigarette brands and/or other tobacco products to avoid taxes.
  • Higher tobacco taxes will not reduce tobacco use.
  • Tax rates are already too high.
  • Governments interfere with consumers’ freedom of choice when they tax tobacco and discourage use.
  • Governments’ responsibility should end with making the risks of tobacco use widely known to people.
  • Tobacco companies agree with sensible industry regulation, including small and predictable tax increases that do not encourage smuggling.

Download: the FCA and Campain for Tobacco-free Kids fact sheet for more information (335KB)

Taxation and price: essential facts

 

The most effective policy for reducing tobacco consumption is to increase the price of tobacco products through tax
increases.

Higher taxes are particularly effective in reducing smoking among vulnerable populations, such as youth, pregnant
women, and low-income smokers. 

Increasing the price of tobacco through tax increases will decrease its consumption, save lives and raise tax revenue.

Download: the FCA and Campain for Tobacco-free Kids fact sheet for more information (336KB)

 

$1trillion and other tobacco price tags

Death and disease come to mind first when thinking about the harm caused by tobacco. One billion people will die this century due to tobacco use, unless urgent action is taken. But tobacco also imposes enormous economic costs.

Fact Sheet: Costing action, and inaction, on tobacco control

An effective strategy to get the attention of all units of a government is to calculate the cost to the economy associated with the tobacco epidemic and compare this figure with the cost of implementing policies and programmes to address it.

FCTC reporting: Tracking the tobacco control treaty's progress

In 2014 an expert group was set up to review and improve how Parties to the WHO Framework Convention on Tobacco Control report on their obligations.

The expert group will need to:

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