Increasing Taxes on Tobacco in Low and Middle-Income Countries : Hurting or Saving the Poor?
Policy makers hesitate to increase tobacco taxes over concerns about taxes being regressive and potentially increasing poverty and inequality. This note summarizes a set of studies of the effects of raising tobacco taxes in 11 low and middle-income...
| Main Authors: | , |
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| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/840531596003778706/Increasing-Taxes-on-Tobacco-in-Low-and-Middle-Income-Countries-Hurting-or-Saving-the-Poor http://hdl.handle.net/10986/34309 |
| Summary: | Policy makers hesitate to increase
tobacco taxes over concerns about taxes being regressive and
potentially increasing poverty and inequality. This note
summarizes a set of studies of the effects of raising
tobacco taxes in 11 low and middle-income countries using an
extended cost-benefit analysis (ECBA) and harmonized
national household budget survey data and introduces the
TOBACTAX Tool. The studies find that demand price
elasticities for tobacco products are larger among
lower-income households and that the poor receive the
largest long-term gains from tobacco taxation. Tobacco taxes
have progressive long-term effects due to lower medical
expenses and added years of productive life, which
contribute to poverty reduction in most countries studied.
TOBACTAX Tool can help replicate such analyses elsewhere. |
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