Modeling the Impacts of Tobacco Tax Increases in Montenegro: A Simulation Model [Policy Brief]

This Policy Brief was written by the Institute for Socio-Economic Analysis (ISEA) in Montenegro. The policy brief presents a simulation model that assesses the impact of tobacco tax increases on tobacco consumption, government revenues, smoking prevalence, and averted premature deaths. The researchers consider the effect of increasing the excise tax by 3 euros per 1,000 cigarettes in 2024 and 2025, to 52 and 55 euros per 1,000 cigarettes, respectively. The findings suggest that this would prevent 1,247 premature smoking-attributable deaths among adults and 779 deaths among youth in 2024 due to a reduction in smoking prevalence from 31% to 28%. This assessment of the benefits is an underestimate since it does not account for the improved health of the population or the productivity gains. Further, tax revenues would increase in both years simulated, by 1.6% in 2024 and 2.8% in 2025. The policy brief concludes with recommendations for policy makers to raise tobacco taxes and strengthen tobacco control to improve public health while raising revenues.