Research

The Impact of Tobacco Tax Increases on Tobacco Consumption, Tax Revenue, and Premature Deaths in Albania

This Policy Brief was written by Development Solutions Associates (DSA) in Albania. The policy brief examines the impact that two tax increase scenarios would have on tobacco consumption, tax revenue, and premature deaths in Albania. The first scenario follows the historical annual change of 4%, while the second scenario follows guidance from the World Bank, with an annual increase of 8% from 2022 to 2024 followed by an annual increase of 5% from 2025 to 2030. In the first scenario, consumption would remain stable, while it would significantly decrease in the second scenario. In the second scenario, 5% more revenue would be collected by the government, which amounts to an additional €77 million compared to the first scenario. Finally, 33,000 less smokers are expected to die prematurely in the second scenario relative to the first scenario between 2022 and 2030. In addition, the findings show that 50% of the deaths averted in the second scenario are low-income smokers. The policy brief concludes by recommending that the government significantly increase the excise tax on cigarettes in order to reap fiscal and public health benefits.

October 2021

Location(s): Albania, Europe

Content Type: Policy Brief

Topic(s): Economic impacts of tobacco control, Impact on demand, Impact on the poor, Tax and price, Tobacco taxes revenues

Authors(s): Drini Imami, Ph.D., Edvin Zhllima, Elvina Merkaj, Irena Gjika

Citation