Research

Accelerating Progress on Effective Tobacco Tax Policies in Low- and Middle-Income Countries: Romania

This Report was written by Aspen Institute Romania in Romania. The report provides an overview of the current state of tobacco use and tobacco control in the country, as well as future policy alternatives. Within the EU, Romania is the second largest cigarette producer, while raw tobacco production has decreased since the 2000s. In terms of consumption, the price elasticity for demand for cigarettes is -0.7033 and the income elasticity for demand is 0.7435. Cigarette excise taxes have increased constantly over the last 10 years, but cigarettes have still become more affordable due to significant income growth in that time. The researchers also assess the impact of three tax increase scenarios on cigarette consumption. Their findings show that raising taxes twice as much as the baseline would reduce consumption by 12% by 2026 and generate an additional 1.1 billion Lei in tax revenue. In comparison, consumption would increase by 2026 with the slight tax increases adopted in the Excise Calendar. The report concludes with policy recommendations to reduce tobacco use and raise tax revenues.