Low Tobacco Taxation in Times of High Inflation: Why Tobacco Has Become More Affordable in Albania

This Policy Brief was written by Development Solutions Associates (DSA) in Albania. The policy brief assesses the trend in tobacco affordability within the context of high levels of inflation. Specifically, the researchers focused on the period from December 2020 to November 2023. In that time frame, the price of tobacco rose by almost 12%, while the overall inflation increased by 15%. Food costs, however, increased by 28% during that time, more than double the increase in cigarette prices. Relative to food, cigarettes became between 13% and 17% cheaper since December 2020. Cigarette costs in Albania have also grown at a slower pace than in other countries in the Western Balkans due to lower taxes, contributing to this growing affordability. The brief concludes with recommendations for policy makers to raise excise taxes to keep up with inflation at a minimum in order to effectively discourage consumption and improve public health. 

[ALBANIAN]