uk bat.com - Tobacco taxes
Many governments use tax hikes to try to stop people smoking
Do sudden and steep increases in tobacco excise taxes - a swingeing 200 per cent in one case - really cause smokers to quit in their droves or to cut down drastically?
The plain answer is no. There is evidence to show that while some smokers are encouraged to stop or smoke less, punitive tax rises do not result in proportionate reductions in cigarette consumption.
Most national governments are parties to the World Health Organisation’s Framework Convention on Tobacco Control which requires them to use tax or price policies to cut tobacco consumption.
However, data show rapidly rising tobacco taxes are likely to drive many smokers to find cheaper, often illegal (untaxed counterfeit and smuggled) alternatives to their usual brands.
Illicit trade accounts for an ever increasing proportion of the tobacco market in a growing number of countries – an estimated 30 per cent in Ireland, over a quarter across Romania and Malaysia and 50 per cent in Hong Kong, for example.
Of course, black market cigarette sellers are unlikely to adhere to laws about not selling to the under age and this worries everyone, bar the criminals.
Read more about illicit trade.
What we believe
We’re not against increases in tobacco taxes.
Manageable increments, typically in line with inflation, make the most sense: governments are less likely to inadvertently fuel illicit trade and tax revenues are more predictable.
For people wanting to stop smoking, the keys are motivation and self-belief. We don’t build our business on persuading people to smoke or trying to stop people from quitting. We believe that if you want to quit, you should.