Where to next for countries with high tobacco taxes? The potential for greater control of tobacco pricing through licensing regulation

Michelle Scollo, J Robert Branston

Research output: Contribution to journalArticlepeer-review

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Abstract

Optimising the taxation of tobacco products should be among the highest priorities for health and hence economic policy in every country. The WHO Technical Manual on Tobacco Tax Policy and Administration released in April 2021 provides invaluable advice, including 26 best practice recommendations on policy design, administrative efficiency, and addressing industry tactics to circumvent tobacco tax increases. Introducing and increasing tobacco taxes is the most important tobacco control measure for any jurisdiction. The effects of simple tax structures, high tax levels, and frequent above-inflation increases in specific excise duties can be enhanced through strict controls on packaging (including pack size), product design, and discounting. However, even with such measures, tobacco companies can continue to undermine the effectiveness of tax policy by offering some products in their ranges at very low prices, as well as gradually and selectively increasing the prices of some but not all products after tax increases. This paper is aimed at policy makers in countries that have already adopted best practice tax policy. It explores the idea of wholesale price capping combined with retail licensing to address the problems of brand proliferation, dispersion of prices, cushioning and strategic under/over-shifting of tax increases, thereby radically and sustainably increasing the effectiveness of tobacco tax policy while also raising additional tax revenue for governments by reducing industry profitability.
Original languageEnglish
Pages (from-to)235-240
Number of pages6
JournalTobacco Control
Volume31
Issue number2
Early online date3 Mar 2022
DOIs
Publication statusPublished - 3 Mar 2022

Keywords

  • economics
  • price
  • public policy
  • taxation

ASJC Scopus subject areas

  • Health(social science)
  • Public Health, Environmental and Occupational Health

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