Excise taxes are applied specifically to tobacco products and directly increase the retail price. Higher prices dissuade people from considering or continuing a smoking habit.

Tax and price information is collected from Member States every two years by WHO. This indicator is a calculation of how much tobacco excises (specific and ad-valorem) contribute to the retail price of a pack of the most sold brand of cigarettes in the country. The "most sold brand" is determined based on national market share information. The retail price  is the price charged (inclusive of all taxes) on a pack of 20 cigarettes purchased at a convenience store or supermarket in the capital city. WHO uses information provided by Member States on tax policy to calculate the share of each type of tax in the price of cigarettes. An amount-specific excise tax is a tax on a selected good produced for sale within a country, or imported and sold in that country. In general, the tax is collected from the manufacturer/wholesaler or at the point of entry into the country by the importer, in addition to import duties. These taxes come in the form of an amount per pack, per 1000 sticks, or per kilogram. Example: US$ 1.50 per pack of 20 cigarettes. An ad valorem excise tax is a tax on a selected good produced for sale within a country, or imported and sold in that country. In general, the tax is collected from the manufacturer/wholesaler or at the point of entry into the country by the importer, in addition to import duties. These taxes come in the form of a percentage of the value of a transaction between two independent entities at some point of the production/distribution chain; ad valorem taxes are generally applied to the value of the transactions between the manufacturer and the retailer/wholesaler. Example: 27% of the retail price.

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