Bosnia and Herzegovina Tobacco Excise Tax Modeling (Policy Brief)

This Policy Brief was written by University of Banja Luka (UBL) in Bosnia and Herzegovina. The research examines the fiscal and public health effects of raising cigarette prices through taxation. Specifically, the authors consider an annual increase of 15% of the specific excise tax which would lead to an increase in the price of cigarettes of between 11.3% and 11.6% on average each year. As a result, the number of packs sold would decrease annually between 1.8% and 1.9% on average, while tax revenue would increase annually between 9.2% and 11.7%. Adult smoking prevalence, currently at 41.1%, would decrease, on average, between 2.5 and 5.1 percentage points per year, thus saving between 10,748 and 21,342 smokers from premature death. The policy brief concludes with recommendations for policy makers to reap these benefits by raising the specific excise tax on tobacco.

A corresponding Working Paper can be found here.