back to News

Tobacconomics Scorecard Shines a Light on the Untapped Potential of Countries' Cigarette Tax Policies

On December 15, 2020, Tobacconomics released the first edition of the international Cigarette Tax Scorecard, assessing the performance of cigarette tax policies in over 170 countries.

The top performing countries are Australia and New Zealand, which reflects their high, uniform specific cigarette excise taxes with regular increases that have significantly reduced the affordability of cigarettes. Using purchasing power parity dollars to compare price across countries, cigarettes in Australia were an average of $ PPP 14.47 per pack in 2018, while in New Zealand, they were $ PPP 16.08 per pack.

Countries with the greatest improvement in cigarette tax policy over the four-year period (2014-2018) are Bahrain, Saudi Arabia, the United Arab Emirates, Kyrgyzstan, and the Philippines. The improvements in Bahrain, Saudi Arabia, and the United Arab Emirates reflect the introduction of significant cigarette excise taxes, while those in Kyrgyzstan and the Philippines result from the simplification of previously complicated tiered cigarette excise tax structures and large tax increases. These countries are already reaping the rewards of higher revenues and lives saved.

The region with the highest performing cigarette tax policies is Europe. Nevertheless, the region scored just over half of the possible score—what most would deem a failing grade.

The Tobacconomics Scorecard assesses countries’ cigarette tax policies based on international best practice using data from the World Health Organization. Nearly half scored less than two out of the five-point maximum. There has been little improvement from 2014-2018: the global average score rose only slightly from 1.85 in 2014 to 2.07 in 2018. Although overall scores improved in 89 countries, they became worse in 43 countries.

Tobacco use is the leading cause of preventable death in the world and tobacco taxation is the single best tool to drive down consumption. And, with countries reeling under budget gaps resulting from the COVID-19 pandemic, reforming tobacco taxes provides a quick and easy way for governments to raise much needed revenue for economic recovery. But, the Tobacconomics Scorecard shows that overall, most countries are failing to effectively tax cigarettes.

Each year, tobacco use results in more than 8 million deaths and costs economies around US$ 1.4 trillion worldwide, with the burden falling heaviest on low- and middle-income countries. Tobacco taxes are the single most effective way to minimize the negative health and economic impacts of tobacco consumption. The best way to do this is through a uniform specific excise tax that comprises at least 70% of the retail price and is automatically updated to stay ahead of inflation and income growth.

“The Scorecard shows considerable untapped potential for cigarette tax increases to raise revenue for a COVID-19 recovery and importantly, prevent premature deaths and promote a healthy and productive workforce,” says Tobacconomics director and lead author of the scorecard, Frank J. Chaloupka.

The Cigarette Tax Scorecard is funded by the University of Illinois Chicago’s (UIC) Institute for Health Research and Policy. UIC is a partner of the Bloomberg Initiative to Reduce Tobacco Use.