Tobacco Free Initiative (TFI)

Raise taxes on tobacco


Problem

Despite worldwide recognition of the importance of tax increases to curb tobacco use, evidence shows that since the early 2000s cigarettes in developing countries have become more affordable. Evidence also shows that prices and taxes of tobacco products are still low and there is ample room for increase. On average, globally in 2010, the average price of a pack of cigarettes was only 3.64 $ PPP (Purchasing Power Parity) and the share of excise tax amounted to about 41% of the retail price. In low- and lower-middle income countries, the price was lower than the global average with the price amounting to 1.95 $ PPP and 3.51 $ PPP, respectively. On the other hand, the excise tax rates are much lower than the global average amounting to 25% and 27% of the retail price of a pack of cigarettes for low- and lower-middle income countries, respectively.

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