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Global and regional overview of cigarette taxation
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand2 |
Types of taxes imposed on tobacco productsTypes 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
Tax rates
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand4 |
Average Price of the Most Sold Brand & Excise Tax per pack, and Total Tax Share
Average Price of the Most Sold Brand & Excise Tax per pack, and Total Tax Share
By Income Group 2010
Source: WHO GTCR III
4.93
3.71 3.51
1.95
3.64
2.62
1.570.95
0.491.47
65.5%
51.6%40.8%46.5%50.8%
High Income Upper-middleIncome
Lower-middleIncome
Low Income Global
Inte
rnati
onal
$
%
Average price per pack Excise tax per pack Total Tax share, % Price
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand5 |
Average Price of the Most Sold Brand & Excise Tax per pack, and Total Tax Share
Average Price of the Most Sold Brand & Excise Tax per pack, and Total Tax Share
By Region 2010
2.88
3.93
1.81
4.02
3.19
6.04
0.941.37
0.47
2.21
1.361.95
65.6%
53.6%
52.9%
39.0%
45.2%43.2%
AFRO AMRO EMRO EURO SEARO WPRO
Inte
rnati
onal
$%
Average price per pack Excise tax per pack Total tax share (%of Price)
Source: WHO GTCR III
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand6 |
0%10%20%30%40%50%60%70%80%
Excise tax share Total tax share
Total and Excise Tax share of Price of Most Sold Brand, 2010
Total and Excise Tax share of Price of Most Sold Brand, 2010
Source: WHO GTCR III
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand7 |
Price of most sold brand, , $PPP excise tax and total tax as % of price of cigarettes, 2010
Price of most sold brand, , $PPP excise tax and total tax as % of price of cigarettes, 2010
Source: WHO GTCR III
-
1.0
2.0
3.0
4.0
5.0
6.0
Mala
ysia
Thaila
nd
Nepal
Brunei
Indo
nesia
Mon
golia
Laos
Bangla
desh
Cambodia
0%10%20%30%40%50%60%70%80%
Retail price, PPP Excise tax PPP Total tax share
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand8 |
Affordability of cigarettes over timeAffordability of cigarettes over time
Affordability of CigarettesA
ffo
rdab
ilit
y I
nd
ex,
Viet Nam
Bangladesh
China
Pakistan
Indonesia
1995=1
Mo
re a
ffo
rda
ble
tha
n 1
99
5L
ess a
fford
ab
le th
an
1995
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.
Tax structure
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand10 |
Excise system on cigarettes 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
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand11 |
Average price and excise tax by tax structure, 2010
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
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand12 |
Different bases for tiered systems around the world
Different bases for tiered systems around the world
Differential /Tiered Excise taxes on cigarettes
Number of countries
Total covered 156
With tiers 32 (21%)
Base of tiers Retail price 11
Producer price 2
Sales volume 1
Production volume 1
Type - filter/non filter 12
Type - hand/machine made 2
Type - kretek/white cigrette 1
Packaging soft/hard 3
Cigarette length 4
Trade 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 exciseEight countries differentiate their excises based on more than on criteria.
Source: TMA 2009
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand13 |
Countries applying different types of taxes with tiers or at a uniform rate
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
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand14 |
Types of excises in participating countriesTypes of excises in participating countries
Specific Ad valorem Mix
Tiers Uniform Tiers Uniform Tiers Uniform
Indonesia, Nepal
Brunei, Mongolia
Bangladesh Cambodia, Myanmar, Thailand
Laos Malaysia
Revenues and expenditure
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand16 |
167.57
17.53 5.430.0010.0131.356
0
20
40
60
80
100
120
140
160
180
High-income
Middle-income
Low-income
US
$ p
er c
apit
a
Per capita excise taxrevenue from tobaccoproducts
Per capita publicspending on tobaccocontrol
Revenues from tobacco taxes and tobacco control expenditure, 2009Revenues from tobacco taxes and tobacco control expenditure, 2009
Source: WHO GTCR III
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand17 |
Revenues from tobacco taxes and tobacco control expenditure, 2009
Revenues from tobacco taxes and tobacco control expenditure, 2009
Source: WHO GTCR III
52.613
6.313
31.252
24.151
0.041
0.0300.001 0.0860.0000.3200.0
10.0
20.0
30.0
40.0
50.0
Brunei Bangladesh Indonesia Mongolia Thailand
Per capita Excise revenue, USD Per capita Expenditure on TC, USD
X 165
X 7,450
X 170,707
X 1.36
X 280
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand18 |
Countries which earmark tobacco taxes for health
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
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand19 |
Examples of earmarkingExamples 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
TOBACCO TAX TRAINING WORKSHOP26-30 March 2012 – Bangkok, Thailand20 |
ConclusionsConclusions
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