August 10, 2018

Tobacco Tax Increases Are Needed to Achieve the SDGs

Although tobacco taxes may not seem to be the topic du jour in many development policy circles, these taxes, as part of a comprehensive tobacco control package, are helpful in achieving many of the sustainable development goals. A new brief by Tobacconomics Director, Frank Chaloupka, makes the case for increasing tobacco taxes as a way to achieve progress on multiple Sustainable Development Goals.

The key point of the brief is that while tobacco taxation is an important policy instrument in improving public health, it also furthers other development priorities, including education, nutrition, poverty-eradication, reducing inequality, and responsible production and consumption. Drawing upon recent research from the World Health Organization and the United States National Cancer Institute, this brief highlights the harms of tobacco use and impacts of tobacco taxes on reducing these harms against the backdrop of the 2030 Agenda for Sustainable Development.

For instance, the global health and economic costs from tobacco-related diseases are a staggering $1.4 trillion US dollars. These are public and private domestic resources that could otherwise go to expenditures on education, nutritious food, and quality healthcare. Unaccounted for are the costs to the environment through tobacco cultivation, production and consumption; and opportunity costs to caregivers of those with tobacco-related ill health, who could otherwise pursue further education or paid employment.

Since 80% of smokers worldwide live in low- and middle-income countries, most tobacco-related ill health is experienced by people in countries that most desperately need to develop and preserve human capital. And across the globe, in both developed and developing countries, lower-income populations are more likely to smoke, as well as have more limited access to quality healthcare. Thus, tobacco use pushes people further into cyclical poverty. At the same time, however, lower-income tobacco users are two to three times more responsive to increases in the price of tobacco products. If prices increase, they are much more likely to quit, cut back, or never start using tobacco. Young people share the same sensitivity. These facts present a strategic opportunity to reduce tobacco use among the most vulnerable populations, and thereby free up key resources required to advance sustainable development priorities.

For this reason, curbing tobacco use is rightly included as target under “Sustainable Development Goal 3: Ensuring healthy lives and promote well-being for all at all ages” and tobacco taxation is noted in the Addis Ababa Action Agenda as “an effective and important means to reduce tobacco consumption and healthcare costs and represent a revenue stream for financing for development in many countries.” However, further evidence is just beginning to uncover the broader global toll exacted by tobacco, and it is hoped that this information will lead policy makers to increase taxes on tobacco worldwide.

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