Tobacco Taxes Save Lives, Money says World health organization

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The World Health Organization says that raising taxes on cigarettes and other tobacco products is the smartest and best way to save lives and save billions of dollars in health expenditures.

An estimated eight million people die prematurely every year from tobacco-related illnesses, such as emphysema and lung cancer. Furthermore, the World Health Organization reports the cost of smoking to the global economy comes to more than $1.4 trillion in health expenditures and lost productivity.

The WHO has issued a new manual on tobacco taxes to inform policy makers and others on how to create and implement the strongest tobacco taxation policies for their specific countries.

Jeremias N. Paul Jr. is head of Fiscal Policies and Health Promotion for the WHO. He says scare tactics employed by the tobacco industry are a key hindrance to raising taxes. He urges governments not to be put off by ploys aimed at undermining tobacco reforms, such as:

“If you increase tobacco taxes, you increase smuggling and illicit trade,” Paul said. "You are sued in the court. Raising tobacco taxes is anti-poor. If you increase tobacco taxes, revenues will go down and employment impact will be negative.”

Paul says the new WHO manual documents countries that addressed these scare tactics and succeeded in raising resources through good tax administration. For example, he says the Philippines has increased its revenue and tripled its health budget by taxing tobacco.

"If you raise tobacco taxes, that does more to prevent premature death from non-communicable diseases than any other single health intervention…If you just increase taxes by one dollar, you can raise about $200 billion of additional revenues,” Paul said.

According to the WHO, in 2018 only 38 countries, covering 14% of the global population, had sufficiently high tobacco taxes, which the agency defines as 75% of the retail price of a pack of cigarettes.

When it comes to taxes, Paul says the rule of thumb is to make sure they are high enough to make tobacco products less affordable and deter consumers from using them.