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Tobacco taxes are usually considered regressive, as the poorest individuals allocate larger shares of their budget toward the purchase of tobacco-related products. However, because these taxes also discourage tobacco use, some of the most adverse effects and their economic costs are reduced, including lower life expectancy at birth, higher medical expenses, increased years of disability among smokers, and the effects of secondhand smoke. This paper projects the effects of an increase in the tobacco tax on household welfare in Ukraine. It considers three price-elasticity scenarios among income deciles of the population. The results show that although tobacco taxes are often criticized for being regressive in the short run, in a more comprehensive scenario that includes medical expenses and working years, the benefits of tobacco taxes far exceed the increase in tax liability, benefitting in large measure lower income households. The results also indicate that lower health expenditure seems to be the main driver, because of the reduction in tobacco-related diseases that require expensive treatments. Tobacco taxes are also associated with positive distributional effects related to the higher long-term price elasticities of tobacco consumption.

Economic Adjustment and Lending --- Macroeconomics and Economic Growth --- Poverty Reduction --- Public Sector Development --- Regressive Tax --- Taxation --- Tobacco Control --- Tobacco Tax

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Despite the obvious positive health impacts of tobacco taxation, an argument raised against it is that poor households bear the burden of the increased prices because of their higher share of spending on tobacco. This note includes estimates of the distributional impacts of price rises on cigarettes under various scenarios using the Household Income and Expenditure Survey 2016/17. One contribution of this analysis is to quantify the impacts by allowing price elasticities to vary across consumption deciles. This shows that an increase in the price of cigarettes in Bangladesh has small consumption impacts and does not significantly change the poverty rate or consumption inequality. These findings stem from relatively even cigarette consumption patterns between less and more well-off households. These results hold even considering some small substitution through the use of bidis, which are largely consumed by the poor. The short-term consumption impacts are also negligible compared with the estimated gains because of savings in medical costs and the greater number of productive years of life.

Disease Control & Prevention --- Economic Adjustment and Lending --- Health Care Services Industry --- Health, Nutrition and Population --- Income Distribution --- Industry --- Inequality --- Poverty Reduction --- Public Health Promotion --- Taxation --- Taxation & Subsidies --- Tobacco Price --- Tobacco Tax --- Tobacco Use and Control

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This paper analyzes the welfare and distributional impacts of increasing taxes on cigarettes in Georgia. Increasing taxes on tobacco is an effective measure to reduce smoking. According to some estimates, increasing tobacco taxes could save more than GEL 3.6 billion and 53 thousand lives over a 15-year period. However, concerns over potentially regressive effects on the poor are often raised. An Extended Cost Benefit Analysis (ECBA) is applied to simulate the welfare and distributional impacts of raising prices on cigarettes. Decile-specific price elasticities of demand are estimated to account for heterogenous behavioral responses of different income groups. Empirical estimations confirm that poorer households in Georgia tend to reduce consumption more intensely when faced with higher tobacco prices. The estimated magnitude and distribution of elasticities are comparable to peer countries. The simulations based on household survey data suggest that the long-term net distributional effects of increasing taxes on cigarettes in Georgia are likely progressive. Incorporating the indirect benefits of reduced smoking - reductions in medical expenses and earnings from adverted premature deaths - could bring small, albeit positive, income gains for large sectors of the population. The magnitude of those benefits is most significant among lower-income households, potentially contributing to lift them out of poverty.

Cigarette Tax --- Cost-Benefit Analysis --- Distributional Impact --- Health Care Cost --- Health, Nutrition and Population --- Inequality --- Macroeconomics and Economic Growth --- Mortality --- Poverty Reduction --- Taxation and Subsidies --- Tobacco Control --- Tobacco Tax --- Tobacco Use and Control --- Welfare Effects

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Despite the well-known positive impact of tobacco taxes on health outcomes, policy makers hesitate to use them because of their possible regressive effect, that is, poorer deciles are proportionally more negatively affected than richer ones. Using an extended cost-benefit analysis to estimate the distributional effect of white and clove cigarettes in Indonesia, this study finds that the long-run impact may be progressive. The final aggregate effect incorporates the negative price effect, but also changes in medical expenditures and additional working years. The analysis includes estimates of the distributional impacts of price rises on cigarettes under various scenarios using 2015-16 Indonesia National Socioeconomic Surveys. One contribution is to quantify the impacts by allowing price elasticities to vary across consumption deciles. Overall, clove cigarette taxes exert an effect that depends on the assumptions of conditional price elasticity. If the population is more responsive to tobacco price changes, then people would experience even more gains from the health and work benefits. More research is needed to clarify the distributional effects of tobacco taxation in Indonesia.

Cancer --- Cigarette Smoking --- Disease Control and Prevention --- Health Care Services Industry --- Health, Nutrition and Population --- Industry --- Inequality --- Law and Development --- Law and Justice Institutions --- Price Effect --- Price Elasticity --- Public Health Promotion --- Regressivity --- Sin Tax --- Taxation --- Tobacco Tax --- Tobacco Use and Control

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Excise taxes on alcohol and tobacco have long been a dependable and significant revenue source in many countries. More recently, considerable attention has been paid to the way in which such taxes may also be used to attain public health objectives by reducing the consumption of products with adverse health and social impacts. Some have gone further and argued that explicitly earmarking excise taxes on alcohol and tobacco to finance public health expenditures-marrying sin and virtue as it were-will make increasing such taxes more politically acceptable and provide the funding needed to increase such expenditures, especially for the poor. The basic idea-tax "bads" and do "good" with the proceeds-is simple and appealing. But designing and implementing good "sin" taxes is a surprisingly complex task. Earmarking revenues from such taxes for health expenditures may also sound good and be a useful selling point for new taxes. However, such earmarking raises difficult issues with respect to budgetary rigidity and political accountability. This note explores these and other issues that lurk beneath the surface of the attractive concept of using increased sin excises on alcohol and tobacco to finance "virtuous" social spending on public health.

Accounting --- Added tax --- Addiction --- Aged --- Alcohol consumption --- Alcohol taxation --- Alcohol taxes --- Alcoholism --- Alternative minimum tax --- Children --- Crime --- Debt markets --- Differential taxation --- Earmarked tax --- Economic analysis --- Economic development --- Economic efficiency --- Economic theory & research --- Effective tax rates --- Equity --- Evasion --- Exchange --- Excise tax --- Exercises --- Expenditure --- Externalities --- Families --- Finance --- Finance and financial sector development --- Gambling --- Good --- Goods --- Governments --- Health --- Health care --- Health effects --- Health monitoring & evaluation --- Health outcomes --- Health policy --- Health promotion --- Health spending --- Health, nutrition and population --- Implementation --- Indirect taxation --- Inflation --- International bank --- Intervention --- Isolation --- Knowledge --- Labor --- Laws --- Levy --- Local finance --- Local governments --- Macroeconomic conditions --- Macroeconomics and economic growth --- Management --- Market --- Marketing --- Nutrition --- Passive smoking --- People --- Per --- Product taxes --- Psychology --- Public --- Public economics --- Public expenditures --- Public funds --- Public health --- Public revenues --- Regressive taxes --- Regulation --- Revenue --- Revenue sources --- Risks --- Sales taxes --- Services --- Sin tax --- Sin' tax --- Sin' taxes --- Smokers --- Smoking --- Social policy --- Social research --- Social welfare --- Spending --- Stress --- Tax --- Tax administration --- Tax base --- Tax burdens --- Tax changes --- Tax competition --- Tax evasion --- Tax incidence --- Tax increases --- Tax law --- Tax policy --- Tax rate --- Tax receipts --- Tax reduction --- Tax reform --- Tax revenue --- Tax structures --- Tax system --- Taxation --- Taxation & subsidies --- Taxes --- Tobacco tax --- Transparency --- Uniform taxes --- Use taxes --- Value added tax --- Weight