The Intersection of Tobacco Taxes and Tobacco Farming in Indonesia

Last month (December 2020), Indonesia’s finance minister announced a small increase in tobacco excise taxes—approximately 12.5% on average. Though the public health community typically welcomes any tax increase, to have a meaningful effect on tobacco prices and therefore consumption, increases must be larger than the ones proposed. To make tobacco taxation more effective, not only do increases need to be larger, there also needs to be an increased effort to simplify the tax structure as regulated on the now eliminated Excise Simplification Roadmap. The tiered structure with very different tax rates among cigarette and kretek products continues to generate opportunities for smokers to “trade down”—i.e., switching to cheaper kretek or cigarette brands. Read More

[BAHASA] Irisan antara Kebijakan Cukai Rokok dan Pertanian Tembakau di Indonesia

Pada bulan Desember 2020, Menteri Keuangan Republik Indonesia mengumumkan kenaikan tarif cukai rokok yang tidak terlalu signifikan yaitu dengan rerata sekitar 12,5 persen. Secara umum, pemangku kepentingan kesehatan publik memberi apresiasi atas kenaikan tarif cukai rokok ini. Namun, kenaikan tarif cukai rokok hanya akan berdampak pada harga rokok dan akhirnya konsumsi jika kenaikannya lebih tinggi dari yang telah diumumkan. Agar kenaikan tarif cukai rokok  lebih efektif, tidak hanya kenaikannya harus lebih tinggi, pemerintah Indonesia juga perlu mengupayakan penyederhanaan struktur cukai seperti yang pernah dituangkan dalam Peta Jalan Simplifikasi Cukai Rokok, yang saat ini telah dihilangkan. Struktur cukai rokok dengan tarif cukai rokok yang berjenjang antar produk rokok memberikan ruang kepada perokok untuk beralih ke produk rokok yang lebih murah. Respon perilaku terhadap kenaikan cukai rokok berpotensi mengurangi dampak dari kenaikan cukai rokok terhadap pengurangan konsumsi. Read More

Introducing Tobacconomics’ Tobacco Control Supplement: “The Economics of Tobacco Taxation in Low‑ and Middle‑Income Countries”

Last year, we released a blog series describing the Tobacconomics approach to building think tank capacity. As the project concludes its fourth year, our partners have become adept at producing high-quality research on the economics of tobacco taxation. In this blog, we want to share some lessons learned over the past four years as well as overview our partners’ contributions to the recently released Tobacco Control Supplement. Read More

New Study Uses Four Different Approaches to Estimate Illicit Cigarette Trade in Brazil

Understanding the scope and nature of illicit cigarette trade is necessary for well-functioning administration. Analysis of illicit trade is needed to guide law enforcement activities, as it provides vital intelligence to customs, police, and other relevant agencies to protect markets and consumers from the inflow of illicit products. Additionally, since the effectiveness of tobacco control measures, including the effectiveness of tobacco taxation, is affected significantly by the availability of illicit products, knowledge about the scope of illicit cigarette trade helps policymakers evaluate newly-implemented tobacco control policies as well as predict the impact of future policies. Read More

The Pass-Through of Alcohol Excise Taxes to Prices in OECD Countries: Filling In the Evidence Gap

Increasing alcohol excise taxes is the most effective regulatory policy to reduce excessive drinking and related harms. Tax pass-through rates measure how much prices increase when taxes are increased by one unit – a critical step in the mechanism of excise taxes as an alcohol control policy. If prices are increased more than tax increases (i.e., tax pass-through rate > 1), the reduction of alcohol consumption will be higher, and vice versa. Read More

World No Tobacco Day 2020: Tobacco Taxes Are a Powerful Tool Against Tobacco Industry Efforts to Attract Youth

Sunday, May 31, 2020 is World No Tobacco Day and this year’s theme focuses on efforts by the tobacco industry to target young people. Raising tobacco taxes is one of the most effective tobacco control policy tools to discourage tobacco use in the overall population, but even more so for young people. In observation of World No Tobacco Day, this Tobacconomics blog entry highlights research from our partners around the world that demonstrates how increasing taxes on tobacco products is a particularly effective policy to prevent and reduce tobacco use among young people. Read More

A Closer Look at Tobacco Tax Progressivity: New Research from UIC Think Tank Partners in Latin America

Most research on the distributional impacts of tobacco taxation focuses on the shift in the tax burden for different income groups that occurs immediately after a tax increase. In most countries, poorer people spend proportionately more of their income on tobacco products, and they are much more sensitive to tax increases. Thus, when faced with a tax increase, their consumption of tobacco decreases more, relative to people who are older or with higher incomes, either through cessation, decreased intensity of consumption, or not starting to smoke at all. Read More