The Framework Convention Alliance for Tobacco Control

Fact Sheets

Tax increases don’t need to wait for the Illicit Trade Protocol

Substantial progress has been made in negotiating global controls on illicit trade in tobacco, and governments may be tempted to wait until these controls are in place before improving their tobacco tax policies. This would be a mistake, in two respects.

NOW is the time to raise tobacco taxes

At COP6 in 2014, Parties to the WHO Framework Convention on Tobacco Control (FCTC) adopted guidelines on FCTC Article 6, dealing with price and tax measures. The guidelines mark the first time that governments came together and agreed on what makes – and what doesn’t make – good tobacco tax policy. 

Strengthening the tobacco control treaty on the ground

When governments established the working group (WG) on sustainable measures for the WHO Framework Convention on Tobacco Control (FCTC) in 2012, FCA immediately started advocating for sufficient resources so that the WG could hold meetings and take other action required to address its mandate.

Taxation and price: cigarette affordability

 

A clear dichotomy has developed between high-income and low and middle-income countries.

Cigarettes are becoming less affordable in high-income countries and more affordablein low and middle-income countries.

Download: the FCA and Campain for Tobacco-free Kids fact sheet on cigarette affordability for more information (338KB)

 

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)

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