Tobacco Taxation

Image credit: © IDRC / Sandy Campbell, Shutterstock

Tobacco use causes more than 8 million deaths globally each year, with around 80% of the world’s smokers living in low- and middle-income countries. The costs of tobacco are high in terms of the negative impacts on public health and the economy. Increasing taxes on tobacco is the most effective way to reduce tobacco consumption and improve health outcomes, while also raising government revenues. However, as a policy tool, tobacco tax is widely underutilised. This is partly due to lobbying by the industry, which often makes exaggerated and false claims about the potential impacts of increasing taxes. Therefore, rigorous independent research and evidence is needed to inform policymakers in developing countries.

Blogs:

February 2020
By Laura Rossouw

Cigarette sales in most African countries are going up all the time. But smoking rates are much lower than in high-income countries. Because of these comparatively lower smoking prevalence rates – combined with the urgent need to address infectious diseases – tobacco control policies have largely not been prioritised. Nigeria is a case in point. Preventing smoking rates…

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News and events:

June 2020
news
Our new resource page on tobacco taxation

May 31st was World No Tobacco Day. Every year, tobacco use causes more than 8 million deaths globally, and 80% of the world’s smokers live in low- and middle-income countries. The costs of tobacco are high in terms of the negative impacts on public health and the economy. Increasing taxes on tobacco is the most…

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Research Projects:

Current Project
Tobacco tax reform in West Africa
Project Researchers: Prof Corné van Walbeek, REEP, Dr Hana Ross, REEP, Prof Abdoulaye Diagne, CRES, Dr Pape Yona Mané, CRES & Kisten van der Zee, REEP

Explore our new page on tobacco taxation Purpose Africa is vulnerable to the tobacco industry. It has a large and young population, rapid economic growth, a desire to attract foreign investment, and weak tobacco control policies. Although smoking prevalence in many African countries is modest, preventing its rise, especially amongst youth, remains a huge challenge….

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Current Project
The fiscal and public health impact of a change in tobacco excise taxes in Ghana
Project Researchers: Ama Fenny, University of Ghana, Felix Asante, Aba Crentsil & Christian Osei

This study will provide evidence-based analysis of tobacco taxation in Ghana. The main research theme addressed will be to assess best practices in tobacco taxation centering on the impact of tobacco tax increases on the retail price of tobacco products, tobacco consumption and government tax revenue. We hypothesize that this will provide the evidence needed…

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Publications:

November 2020
Fiscal and Public Health Impact of a Change in Tobacco Excise Taxes in Ghana
By Ama Pokuaa Fenny, Aba Obrumah Crentsil, Christian Kwaku Osei & Felix Ankomah Asante

Cigarettes have generally become less affordable over time in developed economies, with increased taxes and low income growth, but more affordable in developing countries, where there have been minimal changes in taxes (Chaloupka et al. 2019). Studies by the WHO suggest that 80% of the world’s smokers live in low- and middle-income countries (LMICs), and…

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Fiscal and Public Health Impact of a Change in Tobacco Excise Taxes in Ghana
By Ama Pokuaa Fenny, Aba Obrumah Crentsil, Christian Kwaku Osei & Felix Ankomah Asante

This paper predicts the fiscal and public health outcomes from a change in the excise tax structure for cigarettes in Ghana. More than 5,000 people are killed by diseases caused by tobacco every year in Ghana (Tobacco Atlas 2018). Currently the country has a unitary tax administration approach, with a uniform ad valorem tax structure…

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May 2020
De-Linking Tobacco Taxation and Illicit Trade in Africa
By Max Gallien

Smoking tobacco has been much less common traditionally in Africa than in Europe or North America. But this is changing. As Africa has become a growth market for the tobacco industry, adverse health effects are increasingly visible. While increasing tobacco taxation has been shown as the most effective policy tool in curbing tobacco consumption, many…

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Partner publications:

Academic
Measuring the effects of the new ECOWAS and WAEMU tobacco excise tax directives
by Jean Tesche and Corne Van Walbeek (September, 2020)
In December 2017, the 15-member ECOWAS (Economic Community of West African States) and the 8-member WAEMU (West African Economic and Monetary Union, a subset of ECOWAS) passed new Tobacco Tax Directives. Both Directives increased the minimum ad valorem excise tax rate to 50%. In addition the ECOWAS Directive introduced a minimum specific tax (US$ 0.02/stick), but the WAEMU Directive did not. This paper examines the likely effects of these new Directives on cigarette prices, sales volumes and revenues.
See resource
Academic
Public finances and tobacco taxation with product variety: Theory and application to Senegal and Nigeria
by Théophile T. Azomahou ,Racky Baldé, Abdoulaye Diagne, Pape Yona Mané, Ibrahima Sory Kaba (February, 2019)
This study endeavors to answer two questions: which category of excise taxes is more appropriate for Senegal and Nigeria and which consequences an increase of the tobacco taxes would have on the price, the demand and the tax revenues in each one of the two countries?
See resource

West Africa Tobacco Taxation Factsheets

Our partners on this issue

Consortium pour la Recherche Economique et Sociale logo
REEP logo
Centre for the Study of the Economies of Africa logo
The Institute of Statistical, Social and Economic Research, University of Ghana logo
IDRC logo
Cancer Research UK logo