New Tobacconomics Cigarette Tax Scorecard Reveals Lack of Progress on Tobacco Taxes
The third edition of the Tobacconomics Cigarette Tax Scorecard is out today, with troubling results for the tobacco control community. Governments have made insufficient progress in addressing one of the world’s leading causes of preventable death: tobacco use.
The Scorecard assesses countries’ tobacco taxation performance across four key components—price, change in affordability, tax share of price, and tax structure—on a scale of 0 to 5 using the latest WHO data from 2022. The maximum score of 5 is awarded when countries implement well-established best practices in each component that are proven to reduce consumption and increase tax revenues. Unfortunately, the results show that most countries are not aligning with expert recommendations.
The global average overall score in 2022 dipped to only 1.99 out of 5 after a modest increase from 1.89 points in 2014 to 2.25 in 2020. Only 31 countries of 170 saw an improvement in their overall score between 2020 and 2022, yet scores in 76 countries worsened in that time.
This edition of the Scorecard shows that countries are especially struggling to reduce the affordability of cigarettes. Post-pandemic economic recovery has included rapid growth and inflation, and cigarettes taxes are not keeping up with these conditions. As a result, cigarettes remain accessible to vulnerable groups, including youth. In Europe specifically, cigarettes have actually become more affordable on average, threatening to undo progress on tobacco control.
Excise cigarette tax structures are another source of concern, with many countries maintaining less than optimal complex tiered systems or those that rely on ad valorem taxes. These structures undermine the benefit of tax increases, allowing the industry to continue to sell very cheap cigarettes. Furthermore, some countries still do not apply excise taxes on cigarettes at all, fully missing out on the associated fiscal and public health benefits.
There is substantial room for improvement in the remaining two components as well. The average cigarette price from 2020 to 2022 decreased by $Intl PPP 1.83 per pack. The average price among low-income countries, however, showed a more optimistic trend in that time frame, increasing by 10%. The global average tax share of price score also increased, although total and excise tax shares remain far below the recommended minimum benchmarks of 75% and 70%, respectively.
These results, which reveal a lack of progress and even some setbacks globally, demonstrate an urgent need to strengthen tobacco tax systems and significantly raise cigarette taxes. Policy makers should seize the opportunity to implement the best practices outlined in the Scorecard to reap the health and economic benefits of effective tax policies.
The third Cigarette Tax Scorecard can be found at: https://tobacconomics.org/research/cigarette-tax-scorecard-3rd-edition/