Global and regional overview of cigarette taxation

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Global and regional overview
of cigarette taxation
Types of taxes imposed on tobacco products
 Excises
– Specific: based on quantity (e.g. $1.50 per pack regardless of price)
– Ad-Valorem: based on value (e.g. 45 percent of the manufacturer’s
price)
– Hybrid/mix taxes- both specific and ad-valorem
 VAT or Sales Taxes
 Customs/import Duty
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Tax rates
Average Price of the Most Sold Brand & Excise
Tax per pack, and Total Tax Share
By Income Group 2010
International $
65.5%
4.93
Excise tax per pack
50.8%
3.71
46.5%
40.8%
51.6%
3.64
3.51
2.62
1.95
1.57
High Income
Total Tax share, % Price
Upper-middle
Income
0.95
Lower-middle
Income
1.47
0.49
Low Income
Global
Source: WHO GTCR III
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
%
Average price per pack
Average Price of the Most Sold Brand & Excise
Tax per pack, and Total Tax Share
By Region 2010
Average price per pack
Excise tax per pack
Total tax share (%of Price)
65.6%
53.6%
International $
%
43.2%
52.9%
45.2%
6.04
39.0%
4.02
3.93
3.19
2.88
0.94
AFRO
1.37
1.81
2.21
1.95
1.36
0.47
AMRO
EMRO
EURO
SEARO
WPRO
Source: WHO GTCR III
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Total and Excise Tax share of Price of Most Sold
Brand, 2010
Excise tax share
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Total tax share
Ca
m
bo
di
a
Ne
pa
l
on
go
lia
M
La
os
ar
ya
nm
M
al
ay
sia
M
In
do
ne
sia
Br
un
ei
ad
es
h
Ba
ng
l
Th
ai
la
nd
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: WHO GTCR III
Price of most sold brand, , $PPP excise tax and
total tax as % of price of cigarettes, 2010
6.0
80%
70%
60%
50%
40%
30%
20%
10%
0%
5.0
4.0
3.0
2.0
1.0
Retail price, PPP
Excise tax PPP
Ca
m
bo
di
a
ad
es
h
Ba
ng
l
La
os
on
go
lia
M
In
do
ne
sia
Br
un
ei
Ne
pa
l
Th
ai
la
nd
M
al
ay
sia
-
Total tax share
Source: WHO GTCR III
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Affordability of cigarettes over time
Affordability of Cigarettes
Affordability Index,
Less affordable than
1995
China
Pakistan
Indonesia
More affordable
than 1995
1995=1
Bangladesh
Viet Nam
90 9 91 9 92 9 93 9 94 9 95 9 96 9 97 9 98 9 99 0 00 0 01 0 02 0 03 0 04 0 05 0 06 0 07
19
1
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
Affordability index: dividing price by average GDP/capita for every year. Value for 1995 is assumed to be 1.The
values of other years use 1995 as a base and look at the change from 1995. The estimated values that are less
than 1 indicate that cigarettes become more affordable compared with 1995.
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Tax structure
Excise system on cigarettes
Number of countries
Total covered
182
Specific excise only
51
Ad valorem excise only
54
Mixture of both excises
56
No Excise
20
Note: the countries sum up to 181, the 182nd country is Bhutan where sale is banned so no local
consumption tax is applied
Source: WHO GTCR III
10 |
TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Average price and excise tax by tax
structure, 2010
Excise tax structure
Average price PPP
Average excise PPP
Specific only
4.51
1.78
Ad valorem only
2.38
0.77
Mix system
3.81
2.17
Relying more on specific
4.42
2.54
Relying more on ad valorem
3.40
1.91
Source: WHO GTCR III
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Different bases for tiered systems around
the world
Differential /Tiered Excise taxes on cigarettes
Number of countries
Total covered
156
With tiers
Base of tiers
32 (21%)
Retail price
11
Producer price
2
Sales volume
1
Production volume
1
Type -
filter/non filter
Type -
hand/machine made
2
Type -
kretek/white cigrette
1
Packaging
soft/hard
3
Cigarette length
Trade
4
domestic/imported
1
Weight (tobacco content in cigarette)
1
Leaf content (domestic/imported)
3
Note :Of the 155 countries with available data in TMA, 10 countries has no excise
Eight countries differentiate their excises based on more than on criteria.
Source: TMA 2009
12 |
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Countries applying different types of taxes
with tiers or at a uniform rate
Type of tax (Total number of countries 155)
Specific (48)
Ad Valorem (49)
Mix (48)
Tiers (18)
Uniform (30)
Tiers (6)
Uniform (43)
Tiers (6)
Uniform (42)
Bosnia, Brazil,
Belarus, Croatia,
Fiji, India,
Indonesia,
Kazakhstan,
Kyrgyzstan,
Nepal, New
Zealand, Papua
New Guinea,
Philippines,
Republic of
Korea, Sri
Lanka,
Tajikistan,
Tanzania,
Uzbekistan
Albania, Algeria,
Andorra, Armenia,
Australia, Azerbaijan,
Barbados, Belize,
Botswana, Brunei,
Canada, Colombia,
Cuba, Georgia, Haiti,
Jamaica, Japan,
Lesotho, Malawi,
Mauritius, Namibia,
Norway, Singapore,
South Africa,
Suriname, Swaziland,
Trinidad & Tobago,
Uganda, Uruguay,
USA
Angola,
Bangladesh,
Burkina Faso,
Côte d'Ivoire,
Myanmar,
Senegal
Bolivia, Burundi,
Cambodia, Cameroon,
Chile, Costa Rica,
Congo, Ecuador, El
Salvador, Ethiopia,
Gabon, Guatemala,
Guinea, Guyana,
Ghana, Honduras, Iran,
Kenya, Laos, Lebanon,
Liberia, Libya, Mali,
Mauritania, Mexico,
Mozambique,
Nicaragua, Niger,
Nigeria, Panama
Paraguay, Peru,
Rwanda, Sierra Leone,
Sudan, Togo, Turkey,
Turkmenistan,
Venezuela, Viet Nam,
Yemen, Zambia,
Zimbabwe
China,
Madagascar,
Moldova,
Pakistan,
Russia,
Ukraine
Argentina, Austria,
Belgium, Bulgaria,
Cyprus, Czech Republic,
Denmark, Dominican
Republic, Egypt,
Estonia, Finland,
France, Germany,
Greece, Hungary,
Iceland, Ireland, Israel,
Italy, Jordan, Latvia,
Lithuania, Luxembourg,
Macedonia, Malta,
Montenegro, Morocco,
Netherlands, Poland,
Portugal, Romania,
Serbia, Slovakia,
Slovenia, Spain,
Sweden, Switzerland,
Syria, Thailand, Tunisia,
UK
Note:
1- Out of the 155 countries for which there are data in TMA, 10 countries had no excise
2- The following countries imposed a minimum tax in addition to their statutory rates: the 27 EU countries, Israel, Russia,
Switzerland, Turkey, Turkmenistan and Ukraine.
Source: TMA 2009
13 |
TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Types of excises in participating countries
Specific
Ad valorem
Tiers
Uniform
Tiers
Indonesia, Brunei, Bangladesh
Nepal
Mongolia
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Uniform
Tiers
Cambodia, Laos
Myanmar,
Thailand
Mix
Uniform
Malaysia
Revenues and expenditure
Revenues from tobacco taxes and
tobacco control expenditure, 2009
US $ per capita
180
167.57
Per capita excise tax
revenue from tobacco
products
160
140
Per capita public
spending on tobacco
control
120
100
80
60
40
20
1.356
17.53
0.013
5.43
0.001
0
Highincome
Middleincome
Lowincome
Source: WHO GTCR III
16 |
TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Revenues from tobacco taxes and tobacco control
expenditure, 2009
52.613
50.0
X 165
X 170,707
40.0
X 280
31.252
30.0
24.151
X 1.36
X 7,450
20.0
6.313
10.0
0.320
0.041
0.001
0.000
0.0
Brunei
Bangladesh
Indonesia
Per capita Excise revenue, USD
0.086
0.030
Mongolia
Thailand
Per capita Expenditure on TC, USD
Source: WHO GTCR III
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TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Countries which earmark tobacco taxes
for health
Country
Area
Argentina, Belgium, Bulgaria,
Comoros, Congo, Costa Rica,
Egypt, El Salvador, Guatemala,
India, Jamaica, Korea, Mongolia,
Panama, Philippines, Thailand,
Uruguay, USA (18)
Health (health sector
strengthening, prevention,
treatment)
Djibouti, Iceland, Iran, Poland,
Qatar, Romania, Serbia,
Switzerland, Tuvalu (9)
Tobacco control
Source: WHO 2009
18 |
TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Examples of earmarking
Country
Date
legislation
Amount
Allocation
India
2005
110 0r 180 Rs/1000 sticks
depending on length of
cigarettes
Health Cess funds the National Rural
health Mission (NHRM) programme
(improve health infrastructure and
health systems in rural areas).
Philippines
2004
5% of the incremental excise
tax on alcohol and tobacco
products
The Philippine Health Insurance
Corporation and Department of
Health
Poland
1995
0.5% of the value of the
excise tax on tobacco
products
Tobacco control
Thailand
2001
2% on excise taxes
imposed on tobacco and
alcohol
Thai Health Promotion Foundation:
Priority areas of interest: tobacco,
alcohol, road accident, narcotic
drugs, food, physical exercise,
consumer protection.
Source: WHO 2009
19 |
TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
Conclusions
 Cigarette taxes are low in low and middle income countries
 Tax share as a price is an important indicator for tax level, but it's
also important to look at price levels and evolution of affordability of
products over time
 Different tax structures are applied to cigarettes globally
 Prices and taxes in amount tend to be higher for countries that
apply specific excise
 Excise revenues per capita are much higher than expenditure per
capita on tobacco control programmes
20 |
TOBACCO TAX TRAINING WORKSHOP
26-30 March 2012 – Bangkok, Thailand
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