The Addis Ababa action plan recommends raising taxes on tobacco to finance sustainable development. In the Philippines, a 340% tobacco tax hike helped fund a universal health insurance programme. EURACTIV France reports.
Higher taxes on tobacco will reduce the number of smokers, cut avoidable diseases and increase economic productivity. This is the simple logic behind the one of the United Nations’ key strategies for financing the post-2015 Sustainable Development Goals (SDGs).
Numerous studies have demonstrated the public health benefits of raising taxes on tobacco. In most low and middle income countries, tripling tobacco excise duty would double the price of cigarettes and reduce consumption by 40%, according to the World Health Organisation (WHO).
The UN believes this strategy could be implemented worldwide to help prevent and control non-communicable diseases. In their concluding statements, the participants of the International Conference on Financing for Development, which took place from 13 to 16 July in Addis Ababa, said that “price and tax measures on tobacco can be an effective and important means to reduce tobacco consumption and health-care costs, and represent a revenue stream for financing for development in many countries”.
SDGs tackle tobacco
One of the targets for SDG number 3, to ensure health and promote well-being, is to “strengthen the implementation of the Framework Convention on Tobacco Control (FCTC)”.
“We urge all the countries of the world to strengthen their commitment and to make implementing the WHO’s FCTC a priority for development and health,” said Vera Luiza da Costa e Silva, the FCTC secretary general.
Tobacco is a major risk factor in heart disease, cancers and chronic respiratory diseases, among others. Smoking kills six million people every year: one every six seconds.
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Smoking is on the rise worldwide, and the WHO fears the tobacco-related death toll will reach eight million per year by 2030.
Researchers estimate that tobacco and the diseases it causes have cost the world economy $12,000 billion over the last 20 years. The increased health costs and lost productivity related to tobacco can exacerbate poverty and hamper sustainable development in poor countries.
Policy pioneers
In a report entitled “the economic and health benefits of tobacco taxation,” the FCTC held up France and the Philippines as examples of where radical policy has had a real impact.
Thanks to severe tax increases, the price of tobacco in France has tripled since 1990. The average French adult today consumes three cigarettes per day, compared to six per day in 2005. Cancer rates have also dropped significantly, and tax revenues from tobacco have doubled from €6 billion to €12 billion since the policy was introduced.
>> Read: EU outshone by French tobacco legislation (in French)
The Philippines also provides a persuasive case for tobacco taxation. In 2013, the government raised tobacco excise duty by 340%. This was promoted to the country, which has 17.3 million smokers, as a public health measure, and has revolutionised the way healthcare is funded.
Over the first year the tax brought in $1.6 billion, 85% of which were used to fund the country’s universal health insurance programme.
EU member states are required to charge excise duty of at least 60% on cigarettes, but they are also free to apply higher rates.
The UK collects £6.17 on packs of 20 cigarettes, which accounts for 77% of the price of premium brands, or 88% for the cheapest cigarettes. French excise duty on cigarettes is over 80%.