Innovative financing for health: tobacco taxes
A solidarity tobacco contribution (STC) for international health: A global initiative
An additional small amount levied as part of the regular tobacco excise on each pack of cigarettes consumed could generate substantial revenues and increase the effective total tax rate on cigarettes towards the WHO recommended level of 70% of the retail price. Given the low price elasticity of demand for cigarettes, higher excise taxes will generate sustainable revenues for governments worldwide for at least the short- to mid-term and ensure sustainable revenue stream for financing international health.
WHO estimated that by introducing USD0.05/0.03$/0.01$ per pack of cigarette sold in 43 selected high-/middle-/low-income countries, respectively, a solidarity tobacco contribution (STC) would generate an additional $US 5.46 billion. This is a substantial amount providing much-needed funds for global health.
The countries included in the analysis were Argentina, Australia, Brazil, Canada, Chile, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Norway, Republic of Korea, Russian Federation, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States of America, as well as most of the European Union countries (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, Greece, Hungary, Ireland, Latvia, Lithuania, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden).