Large State Variation in Sugar-Sweetened Beverage Purchases: What We Learn from the Beverage Industry Data

Negative health consequences of excessive sugar-sweetened beverage (SSB) consumption have prompted recommendations for SSB taxation to improve diet and health. Over 40 countries and 8 local US jurisdictions have implemented SSB taxes to date. There is considerable interest in state SSB taxes in the USA, but state-level data on SSB consumption levels is lacking. This article uses proprietary data from the Beverage Marketing Corporation on beverage sales across all US retail channels to estimate state-level per capita SSB purchases in 2021. There is considerable variation in per capita SSB purchases across states, from an estimated annual 23.5 gallons (89.1 L) in Hawaii to 51.8 gallons (196.1 L) in Missouri. Current average levels of SSB purchases at 13 ounces (0.38 L) daily leave little to no room for added sugars from all other sources. Policymakers in states with extra-high SSB purchases, especially in the Midwest, should consider effective evidence-based policies, including fiscal approaches, to increase awareness about SSB risks, encourage healthier beverage choices, and improve population diet.

Modelling the impact of increased alcohol taxation on alcohol-attributable cancers in the WHO European Region

BACKGROUND

Reducing the alcohol-attributable cancer burden in the WHO European Region is a public health priority. This study aims to estimate the number of potentially avoidable cancers in countries of the WHO European Region in 2019 for three scenarios in which current excise duties on alcoholic beverages were increased by 20%, 50%, or 100%.

METHODS

Mean prices and excise duties for beer, wine, and spirits in the Member States of the WHO European Region in 2020 were used as the baseline scenario. We assumed that increases in excise duties (20%, 50%, and 100%) were fully incorporated into the consumer price. Beverage-specific price elasticities of demand, with lower elasticities for heavy drinkers, were obtained from a meta-analysis. Model estimates were applied to alcohol exposure data for 2009 and cancer incidence and mortality rates for 2019, assuming a 10-year lag time between alcohol intake and cancer development and mortality.

FINDINGS

Of 180,887 (95% Confidence interval [CI]: 160,595-201,705) new alcohol-attributable cancer cases and 85,130 (95% CI: 74,920-95,523) deaths in the WHO European Region in 2019, 5·9% (95% CI: 5·6-6·4) and 5·7% (95% CI: 5·4-6·1), respectively, could have been avoided by increasing excise duties by 100%. According to our model, alcohol-attributable female breast cancer and colorectal cancer contributed most to the avoidable cases and deaths.

INTERPRETATION

Doubling current alcohol excise duties could avoid just under 6% (or 10,700 cases and 4,850 deaths) of new alcohol-attributable cancers within the WHO European Region, particularly in Member States of the European Union where excise duties are in many cases very low.

FUNDING

None.

Exploring indigenous perspectives on tobacco tax: how some Māori families are responding in Aotearoa New Zealand

OBJECTIVE

High smoking prevalence rates, combined with a steep tax on tobacco and lower household income, mean that 5% of Māori (indigenous) whānau (family unit) expenditure in New Zealand is on tobacco. This paper outlines whānau perceptions of, and behavioural responses to, increasing tobacco tax.

METHODS

This qualitative study was informed by the Kaupapa Māori theory and used a simplified interpretive phenomenological analysis thematic hybrid methodology. A semistructured, open-ended interview guide was designed and used in one-off focus group interviews.

SETTING AND PARTICIPANTS

Interviews were separately conducted with each of 15 whānau units. A total of 72 participants, most of whom were smokers, took part in the interviews carried out in two geographical regions: one rural/provincial and one urban.

RESULTS

Whānau were concerned about the rising cost of tobacco. However, this concern had not generally translated into quit attempts. Whānau had instead developed innovative tobacco-related practices. Working collectively within their whānau, they were able to continue to smoke, although in a modified fashion, despite the rising costs of tobacco. Whānau thereby resisted the intended outcome of the government's tobacco tax which is to reduce rates of smoking prevalence.

CONCLUSION

In the face of significant government disinvestment in New Zealand tobacco control over the last 10 years, hypothecated taxes should be used to scale up Māori-specific cessation and uptake prevention programmes, supporting authentic Māori partnerships for endgame solutions including restricting the availability and appeal of tobacco.

Impact of three annual tobacco tax rises on tobacco sales in remote Australian Aboriginal community stores

BACKGROUND

There is strong evidence from many settings that tobacco tax rises which increase prices reduce tobacco consumption, but only limited evidence from Indigenous settings.

METHODS

We analysed 3 years (2016-2018) of weekly sales data from 32 stores in remote Aboriginal communities. We used interrupted time series analysis to estimate the immediate impact of the price rice following annual 12.5% tobacco tax rises on sales on (A) stick equivalents of tobacco and (B) fruit and vegetables (kg) per $A1000 of grocery sales, and on the trend in sales between price rises.

RESULTS

We detected 5.8% and 8.2% immediate declines in tobacco sales following the price rises associated with annual 12.5% tax rises in 2016 and 2018, and a non-significant decline (1.6%) following the 2017 tax rise. Decreased sales were mainly driven by declines in mainstream and premium factory-made cigarettes. Fruit and vegetable sales did not change at the time of tobacco price rises.

CONCLUSION

For the first time, we demonstrated evidence of price-sensitivity and the immediate impact of price rises from tobacco tax rises on tobacco sales in remote Aboriginal communities. We acknowledge that Australia already has very high tobacco taxation and prices, but recommend further increases to the taxation of roll-your-own (RYO) tobacco to prevent smokers and industry using cheaper RYO cigarettes to undermine this impact of high tobacco taxes and prices.

Influence Mechanism on Supplier Emission Reduction Based on a Two-Level Supply Chain

The purpose of this paper is to investigate environmental performance of a supply chain which consists of an upstream supplier and a downstream firm. A mathematical model considering both downstream firm's monitoring and governmental intervention is developed. Afterwards, a numerical example is presented to show the equilibriums of these models and the optimal choices of firms and government. The results show that when customers' environmental awareness increases, both total environmental impact and social welfare decrease. The downstream firm's monitoring will certainly reduce the total environmental impact. In most cases, it does not matter whether the downstream firm chooses to monitor the supplier or not, the total environmental impact and social welfare would not be affected when the government chooses subsidy. If a subsidy is present, firms and environment will be better than those without subsidy. Hence, the government is more likely to choose to provide subsidy and the downstream firm will not monitor the supplier's greenhouse gas (GHG) emissions reduction effort. In a few cases when environmental impact is too large, taxation may be the optimal choice for the government and the downstream firm will choose to monitor the supplier's GHG emissions reduction investment.

Circumventing tobacco control and safety policies to promote waterpipe use in smoking venues: the perspective of staff in waterpipe smoking venues

OBJECTIVE

To understand Hong Kong waterpipe smoking (WPS) sales and promotion, including strategies to avoid policy enforcement, from the perspective of WPS venue staff.

METHODS

Qualitative interviews and observations were guided by interpretive description. 20 WPS venue staff who were responsible for preparing and serving waterpipes to patrons and had worked at the bar for at least 3 months were recruited. In-depth semistructured interviews with WPS venue staff were conducted, in addition to covert and participant observations in 10 WPS venues in Hong Kong. Interpretive description involving constant comparative analysis of qualitative data was adopted to facilitate an inductive analytic approach to generate findings.

RESULTS

Two primary themes emerged from analyses of interview and observation data: strategies to avoid law enforcement, and perceived health and safety concerns linked to working and smoking in waterpipe venues. The findings suggest that many Hong Kong venues may be failing to comply with tobacco control policies and developing strategies to circumvent law enforcement. Moreover, waterpipe preparation, allowance of WPS and burning of charcoal in indoor areas were perceived as negatively affecting the health and safety of staff and customers.

CONCLUSIONS

The study provides preliminary evidence indicating the ineffectiveness of current tobacco control policy on WPS. Due to its risks to health and safety, and the need to sustain tobacco control efforts for their intended purpose, waterpipe-specific regulations and stricter surveillance on waterpipe sales and promotion are urgently required.

Modelling the expected impact of cigarette tax and price increases under Vietnam's excise tax law 2015-2020

BACKGROUND

Vietnam's national tobacco control strategy aims to reduce the rate of smoking among male adults from 45% in 2015 to 39% by 2020. The aim of this paper is to assess what contribution cigarette tax increases under Vietnam's current excise tax plan can be expected to make to this target, and to discuss what additional measures might be implemented accordingly.

METHODS

This study uses a mix of administrative datasets and predictive modelling techniques to assess the expected impact of tax and price increases on cigarette consumption, tobacco tax revenues and the rate of smoking between 2015 and 2020.

FINDINGS

The average retail price of cigarettes is estimated to have increased by 16% (sensitivity analysis: 14%-18%) in inflation-adjusted terms between 2015 and 2020, while cigarette consumption is projected to decrease by 5.1% (4.5%-5.5%). The rate of smoking among males is projected to decrease to 42.8% (42.1%-43.6%) compared with the target of 39%. Total tax revenues from cigarettes are projected to increase by 21% (19%-23%), reflecting an extra ₫3300 billion in inflation-adjusted revenues for the government.

CONCLUSION

The current excise tax law is expected to have only a modest impact on the rate of smoking in Vietnam, though it has generated tax revenues. If Vietnam is to achieve its tobacco control targets, the government should implement a mixed excise system with a high-specific component to promote public health by raising the price of cigarettes more significantly.

Measuring the effects of the new ECOWAS and WAEMU tobacco excise tax directives

BACKGROUND

In December 2017, the 15-member ECOWAS (Economic Community of West African States) and the 8-member WAEMU (West African Economic and Monetary Union, a subset of ECOWAS) passed new Tobacco Tax Directives. Both Directives increased the minimum ad valorem excise tax rate to 50%. In addition the ECOWAS Directive introduced a minimum specific tax (US$ 0.02/stick), but the WAEMU Directive did not. This paper examines the likely effects of these new Directives on cigarette prices, sales volumes and revenues.

METHOD

Tax simulation models using comparable data were constructed for each of the 15 countries to estimate the effects of the ECOWAS and WAEMU Directives.

RESULTS

If the 15 ECOWAS members implement the ECOWAS Directive it would substantially increase the retail price of cigarettes (unweighted average 51%, range: 12% to 108%), decrease sales volumes (22%, range: -8% to -39%) and increase tax revenue (373%, range: 10% to 1243%). The impact of the WAEMU Directive on WAEMU countries' cigarette prices (unweighted average +2%), sales volumes (-1%) and revenue (+17%) is likely to be minimal.

CONCLUSIONS

The 2017 ECOWAS Directive, which adds a specific excise tax per pack, along with an increase in the ad valorem tax, substantially improves its members' cigarette tax structure. The specific tax overcomes the weakness of the ad valorem excise tax, since it does not depend on import or ex-factory values, which comprise only a small part of the retail price in ECOWAS countries. We recommend that WAEMU countries adopt the ECOWAS Directive, rather than the WAEMU Directive.

Quantile regression of tobacco tax pass-through in the UK 2013-2019. How have manufacturers passed through tax changes for different tobacco products?

BACKGROUND

The effectiveness of tax increases relies heavily on the tobacco industry passing on such increases to smokers (also referred to as 'pass-through'). Previous research has found heterogeneous levels of tax pass-through across the market segments of tobacco products available to smokers. This study uses retail sales data to assess the extent to which recent tax changes have been passed on to smokers and whether this varies across the price distribution.

METHODS

We use panel data quantile regression analysis on Nielsen commercial data of tobacco price and sales in the UK from January 2013 to March 2019 combined with official UK tax rates and inflation to calculate the rate of tax pass-through for factory made (FM) cigarettes and roll your own (RYO) tobacco.

RESULTS

Following increases in the specific tax payable on tobacco, we find evidence of overshifting across the price distribution for both FM and RYO. The rate of the overshift in tax increased the more expensive the products were. This was consistent for FM and RYO. Additionally, our findings suggest that the introduction of standardised packaging was not followed by changes in how the tobacco industry responded to tax increases.

CONCLUSIONS

Following the repeated introduction of increases in specific tobacco tax as well as standardised packaging, we show that the tobacco industry applies techniques to keep the cheapest tobacco cheaper relative to the more expensive products when passing on tax increases to smokers.

Cigarette affordability in Canadian provinces: a 10-year review

The association between pricing and cigarette consumption is long-established. However, the effects of taxation alone can be diminished if relative income increases. Therefore, affordability is seen as a key determinant of demand for cigarettes, as it combines the impact of changing prices with economic growth or wage increases. This brief analysis employs methods used by the World Health Organization in examining cigarette affordability, and explores the trend in affordability across Canadian provinces over a 10-year period, from 2009 to 2019. The discussion illustrates how monitoring affordability over time can help policy makers in Canadian provinces design tobacco taxation for maximum impact.

Cigarette taxation and price differentials in 195 countries during 2014-2018

INTRODUCTION

Raising tobacco prices via increased taxation may be undermined by tobacco industry tactics to keep budget cigarettes on the market. Price differentials between budget and premium cigarettes allow smokers to trade down in the face of average price rises thus attenuating health benefits. This study examines global trends of price differentials and associations with taxation.

METHODS

Ecological analysis of country-level panel data of 195 countries' price differentials was performed and compared against total, specific excise, ad valorem and other taxation. Price differentials were expressed as the difference between budget cigarette and premium pack prices (as % of premium pack prices). Two-level linear regression models with repeated measurements (2014, 2016 and 2018) nested within each country assessed the association between country-level taxation structures and price differentials, adjusted for year, geographical region and income group.

RESULTS

Worldwide, median price differential between budget and premium 20-cigarette packs was 49.4% (IQR 25.9%-70.0%) in 2014 and 44.4% (IQR 22.5%-69.4%) in 2018 with significant regional variation. The largest price differentials in 2018 were in Africa, with the lowest in Europe. Total taxation was negatively associated with price differentials (-1.5%, 95% CI -2.5% to -0.4% per +10% total taxation) as was specific excise taxation (-2.5%, 95% CI -3.7% to -1.2% per +10% specific excise tax). We found no statistically significant association between ad valorem taxation and price differentials.

CONCLUSION

Total levels of taxation and specific excise taxes were associated with smaller price differentials. Implementing high specific excise taxes may reduce price differentials and improve health outcomes.

Longitudinal evaluation of the impact of standardised packaging and minimum excise tax on tobacco sales and industry revenue in the UK

BACKGROUND

Standardised packaging for factory-made cigarettes (FM) and roll-your-own tobacco (RYO), and a minimum excise tax (MET) were fully implemented in the UK in May 2017 following a 12-month transition period. This paper is the first to examine effects on tobacco sales volumes and company revenues.

METHODS

Analysis of UK commercial supermarket and convenience store electronic point of sale data on tobacco sales. FM and RYO products' data (May 2015-April 2018) yielded 107 572 monthly observations. Expected values from additive mixed modelling were used to calculate trends in: (1) volumes of tobacco sold overall, by cigarette type (FM and RYO) and by seven market segments; and (2) company net revenues. A 10-month period (June 2015-March 2016) before the transition to standardised packs was compared with a 10-month period after the introduction of the MET and full implementation of standardised packs (June 2017-March 2018).

RESULTS

Postimplementation, the average monthly decline in stick sales was 6.4 million (95% CI 0.1 million to 12.7 million) sticks faster than prelegislation, almost doubling the speed of decline. Sales of cheap FM brands, previously increasing, plateaued after implementation. Company monthly net revenues declined from a stable £231 million (95% CI £228 million to £234 million), prelegislation, to £198 million (95% CI £191 million to £206 million) in April 2018.

CONCLUSIONS

The concurrent introduction of standardised packaging and MET in the UK was associated with significant decline in sales and in tobacco industry revenues, and the end of the previous growth in cheap cigarette brands that appeal to young and price conscious smokers.

Alcohol policy and gender: a modelling study estimating gender-specific effects of alcohol pricing policies

AIMS

To describe gender differences in alcohol consumption, purchasing preferences and alcohol-attributable harm. To model the effects of alcohol pricing policies on male and female consumption and hospitalizations.

DESIGN

Epidemiological simulation using the Sheffield Alcohol Policy Model version 4.

SETTING AND PARTICIPANTS

Adults aged 18+ years, England.

INTERVENTIONS

Three alcohol pricing policies: 10% duty increase and minimum unit prices (MUP) of £0.50 and £0.70 per UK unit.

MEASURES

Gender-specific baseline and key outcomes data: annual beverage-specific units of alcohol consumed and beverage-specific alcohol expenditure (household surveys). Alcohol-attributable hospital admissions (administrative data). Key model parameters: literature-based own- and cross-price elasticities for 10 beverage-by-location categories (e.g. off-trade beer). Sensitivity analysis with new gender-specific elasticities. Literature-based risk functions linking consumption and harm, gender-disaggregated where evidence was available. Population subgroups: 120 subgroups defined by gender (primary focus), age, deprivation quintile and baseline weekly consumption.

FINDINGS

Women consumed 59.7% of their alcohol as off-trade wine while men consumed 49.7% as beer. Women drinkers consumed fewer units annually than men (494 versus 895) and a smaller proportion of women were high-risk drinkers (4.8 versus 7.2%). Moderate drinking women had lower hospital admission rates than men (44 versus 547 per 100 000), but rates were similar for high-risk drinking women and men (14 294 versus 13 167 per 100 000). All three policies led to larger estimated reductions in consumption and admission rates among men than women. For example, a £0.50 MUP led to a 5.3% reduction in consumption and a 4.1% reduction in admissions for men but a 0.7% reduction in consumption and a 1.6% reduction in hospitalizations for women.

CONCLUSION

Alcohol consumption, purchasing preferences and harm show strong gender patterns among adult drinkers in England. Alcohol pricing policies are estimated to be more effective at reducing consumption and harm for men than women.

Policy incoherence and tobacco control in Indonesia: an analysis of the national tobacco-related policy mix

INTRODUCTION

Indonesia has a high smoking prevalence that has not diminished significantly since 1990. Considering this, we aim to summarise the existing national tobacco-related policy mix and explore markers of policy incoherence in tobacco control between 2014 and 2020.

METHODS

We conducted (1) a review and synthesis of Indonesian tobacco-related legislation and regulations; (2) a systematic search and synthesis of related literature and news reporting; and (3) interviews with tobacco control activists and academics to understand political will towards tobacco control regulations and the tobacco industry.

RESULTS

Indonesia's existing tobacco-related policy mix lies across the president's office, six national ministries and one independent agency. However, current responsibility lies primarily with four government ministries: Ministries of Health, Finance, Communication and Information, and Trade and Industry, with the Ministry of Finance most active. Evidence demonstrates that official interministerial collaboration was lacking from 2014 to 2020 and suggests that institutional will to introduce more effective tobacco control varies considerably between different arms of government.

DISCUSSION

Political will differs according to ministerial mandates and priorities, fostering a fragmented policy approach and undermining the development of a coherent response. Without political will from the president or national parliament to create an overarching framework for tobacco control, either via ratification of the Framework Convention on Tobacco Control or another mechanism, there remains no formal impetus for intragovernmental cooperation. Nonetheless, this analysis reveals some government progress and 'pressure points' that advocates can focus on to promote tobacco control policies within the current policy mix.

The impact of the Oakland SSB tax on prices and volume sold: A study of intended and unintended consequences

We examine the effects of a sugar-sweetened beverage (SSB) tax that took effect in Oakland, California in 2017. Using rich customized universal product code -level data, we estimate the effect of the SSB tax on prices and volume in the short to medium term in a difference-in-differences framework. We pay particular attention to tax-avoidance strategies that may minimize the policy's intended effect including: (i) transfers to SSBs to the nontaxed border area (i.e., cross-border shopping), (ii) a move from high-priced per ounce single serve to their cheaper multipacks or larger format counterparts (i.e., format switching), and (iii) a move from high-priced beverages to less expensive ones within a category and format (i.e., brand switching). We find that the year-over-year tax pass-through is 49%. We find that volume sold of taxed beverages fell by 14%, but 46% of this decrease is offset with an increase in the border area. We also find evidence of substitution to lower-priced taxed beverages but no evidence of switching to cheaper formats. Finally, we find important dynamic effects with respect to tax pass-through, volume sold and cross-border shopping.

Statewide vaping product excise tax policy and use of electronic nicotine delivery systems among US young adults, 2014-2019

OBJECTIVES

An increasing number of US states have required a tax on electronic nicotine delivery systems (ENDS) in the past few years. This study evaluated the effect of statewide vaping product excise tax policy on ENDS use among young adults.

METHODS

We used the two recent waves (2014-2019) of the Tobacco Use Supplement to the Current Population Survey. A total of 17 896 US young adults were analysed. Difference-in-differences approach along with weighted multilevel logistic regressions were used to evaluate the association of vaping product excise tax policy adoption with current ENDS use, accounting for the clustering of respondents within the same states.

RESULTS

There was an increase in current ENDS use prevalence from 2014-2015 (3.4%) to 2018-2019 (5.4%). The presence of a tax on ENDS products was significantly associated with reduced current ENDS use (adjusted OR (AOR)=0.64, 95% CI=0.43 to 0.95). Importantly, respondents living in states with the policy showed significantly lower increase in ENDS use prevalence during the study period (interaction between within-state changes and between-state differences: AOR=0.57, 95% CI=0.35 to 0.91), controlling for other state-level policies and sociodemographic characteristics.

CONCLUSIONS

Our findings suggest that adopting a vaping product excise tax policy may help reduce ENDS use and suppress the increase of ENDS use prevalence among young adults. Considering that there are still a number of US states that have not implemented vaping product excise tax policy, wider adoption of such policy across the nation would likely help mitigate ENDS use prevalence.

The Market for Bidis, Smokeless Tobacco, and Cigarettes in India: Evidence From Semi-Urban and Rural Areas in Five States

Objectives: Compare the brand availability, pricing and presence of illicit products in semi-urban and rural areas in India across product types and states.

Methods: In late 2017, 382 unique tobacco products were purchased from localities with populations under 50,000 in the states of Assam, Karnataka, Maharashtra, Rajasthan, and Uttar Pradesh. Brand, printed maximum retail price, price paid, tax, and health warning labels (HWLs) were used to compare the market for bidis, smokeless tobacco (SLT), and cigarettes.

Results: Brand availability and pricing of SLT products was similar to cigarettes. Brand availability and pricing of bidis was consistent with having many small producers. Bidis and single serving SLT with spice mixtures were more affordable than cigarettes and SLT sold alone. 2% of SLT and 10% of cigarettes did not feature an India HWL.

Conclusion: The elimination of single serving SLT packets and the removal of tax exemptions for small producers, often exploited by bidi producers, could reduce their respective affordability. State differences in illegal and illicit products could indicate a greater need for enforcement in some states.

Quantifying the social costs and benefits of tobacco in Estonia

BACKGROUND

The tobacco cost literature has predominantly focused on estimating direct healthcare costs and productivity losses from morbidity and mortality. This study places a greater focus on the effects that arise through the fiscal system, illicit trade and fire accidents to estimate the social costs and benefits of tobacco use in Estonia in 2018.

METHODS

A prevalence-based cost-of-illness approach was used, relying on data from the 2017-2018 period. Age-specific tobacco-attributable fractions were employed to estimate the costs and benefits of tobacco-related morbidity and mortality. Data on mortality, morbidity and healthcare costs were received from the National Institute of Health Development and the Estonian Health Insurance Fund. We used data for offences and fires from the Estonian Rescue Board and the Estonian Tax and Customs Board.

RESULTS

It was estimated that the total social cost attributable to tobacco in Estonia in 2018 was €174 million, representing 0.67% of the nation's GDP. If future benefits are also considered, the net social cost is €78 million. While the greatest cost components are productivity losses from mortality and morbidity, the level of tobacco-related law enforcement costs are comparable to direct healthcare costs, both of which exceed €10 million annually.

CONCLUSIONS

Despite the substantial social benefits arising through the fiscal system, tobacco-related costs outweighed these benefits in Estonia in 2018. In addition, a considerable portion of the economic burden of tobacco is associated with illicit trade. Therefore, the healthcare and law enforcement sectors would both benefit from effective tobacco control policies.

Minority Support: School District Demographics and Support for Funding Election Measures

In the context of tight state budgets, local education funding is increasingly important. This article examines the relationship between district-level demographic characteristics and voter support for tax increases to fund the local school district. Using district-level panel data on California school district elections and demographics from 1995 to 2014, we ask the following questions: (1) What is the relationship between demographics and support for school district tax measures? and (2) Does this relationship vary by the type of tax measure? Results suggest that voter support varies by district demographics. However, results differ for bond and property tax measures and suggest that the proportion of Black students increases the likelihood of passing a bond measure but reduces the likelihood of passing a property tax measure. This heterogeneity offers one potential explanation for contradictory evidence in the literature. Results have implications for racial inequality of educational resources between districts.

Questioning the regressivity of tobacco taxes: a distributional accounting impact model of increased tobacco taxation

BACKGROUND

Tobacco taxes, as with other 'sin taxes', are generally regarded as a highly cost-effective mechanism to reduce consumption but are often considered by policymakers to be regressive, undermining efforts to fully implement them at levels recommended by the WHO due to concerns of fairness. We aim to demonstrate whether there are circumstances in which the impacts of additional tobacco taxes are not regressive, using a standard income-share accounting definition of tax burden.

METHODS AND FINDINGS

We apply mathematical modelling and explore the hypothetical distributions in the net change in tobacco taxes and cigarette expenditures by income group, following an increase in tobacco taxation. The hypothetical distribution per income group of additional taxes and cigarette expenditures borne by individuals following tobacco tax hikes was calculated with respect to a selection of parameters including: the change in the retail price of cigarettes, the price elasticity of demand for tobacco, smoking prevalence, cigarette consumption and individual income. We determine the range of hypothetical parameter values for which increased tobacco taxation should not be considered to penalise the poorest income groups when examining marginal cigarette consumption expenditures and using an accounting definition of tax burden.

CONCLUSIONS

Our findings question the doctrine that tobacco taxes are uniformly regressive from a standard income-share accounting view and point to the importance of the specific features of tax policy to shape a progressive approach to tobacco taxation: tobacco tax increases are less likely to be regressive when accompanied by a broad framework of demand-side measures that enhance the capacity of low-income smokers to quit tobacco use.