Excises on Tobacco Products- Effective Instrument for Reducing Prevalence of Smoking

Smoking prevalence in Croatia remains among the highest in Europe. Comprehensive tobacco control policies that include higher tobacco taxes and prices, as well as clean indoor air laws and bans on tobacco marketing, are effective in both, preventing youth from starting to smoke and encouraging smokers to quit. Higher tobacco taxes through higher tobacco prices have been shown through many studies to reduce tobacco consumption. Therefore, tax policy that significantly increases the tax burden on tobacco products is the most effective tool for reducing smoking rates. In Croatia, tobacco excise duties are 60% of the retail price, of which 34% is ad valorem excise, while the share of specific excise is 26%.

These findings provide opportunities to improve tax policy, primarily by further increasing excise duties on tobacco products, which should ultimately result in increased tax revenues, healthcare savings, and improving the health of the population.

A corresponding Report can be found here.