FCTC Article 6: Price and Tax Measures to Reduce the Demand of Tobacco
Raising tobacco taxes is recognized as the most effective and cost-effective strategy for reducing tobacco use. Tobacco use creates a huge economic burden on society through various factors such as direct health costs associated with tobacco-related diseases, indirect costs associated with premature loss of life, disability due to tobacco-related diseases and loss of productivity.
- Determining tobacco taxation policies is a sovereign right of the Parties.
- Effective tobacco taxes significantly reduce tobacco consumption and prevalence.
- Effective tobacco taxes are an important source of revenue.
- Tobacco taxes are economically efficient and reduce health inequalities.
- Tobacco tax systems and administration should be efficient and effective.
- Tobacco tax policies should be protected from vested interests.
Effective tobacco taxes helps to reduce these negative impacts through reduced consumption and prevalence and also contribute to the reduction of governments’ expenditures for the health care costs associated with tobacco consumption.
Raising tobacco taxes is considered as the least implemented measurement of the FCTC. Despite it being identified to have more than 75% efficiency as a tobacco control intervention, only a few countries have increased tobacco taxes to the best practice level. Only 10% of the world’s population are living in countries with sufficiently high taxes. As by 2008, there were 22 countries that already had taxes more than 75% of the retail price of a pack of cigarettes, and by 2014 11 countries newly joined the group. However there are still many countries with extremely low tobacco tax rates, and some countries that do not charge a tobacco tax at all.
Implementation - Sri Lanka
According to the WHO Report on the Global Tobacco Epidemic (2015), Sri Lanka falls among countries with the highest tax incidence in the world. The report also indicates that developed countries such as America, Japan, Singapore and Australia have far lower tax incidences when compared to Sri Lanka.
Tobacco Unmasked Resources
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