The Times Australia
The Times World News

.
The Times Real Estate

.

How raising tobacco taxes can save lives and cut poverty across the Asia-Pacific

  • Written by Sudyumna Dahal, PhD Student, Australian National University
How raising tobacco taxes can save lives and cut poverty across the Asia-Pacific

The human costs of tobacco and smoking worldwide are huge. 1.3 billion people use tobacco, mostly in low- and middle-income countries. More than 8 million people die prematurely because of tobacco, at an annual economic loss of at least US$1.4 trillion. And you don’t have to be a smoker to be harmed: secondhand smoke exposure kills nearly 400,000 women every year.

Asia is home to seven of the world’s top 10 countries with the highest number of smokers: Bangladesh, China, India, Indonesia, Japan, the Philippines, and Viet Nam. Yet, according to our recent research[1] for the United Nations Development Programme, not enough being done to reduce tobacco’s harms.

That’s why it’s worth pointing out a solution that really works, yet not enough Asian nations have acted on it: raising tobacco prices through higher taxes.

As the Philippines, Australia and Aotearoa New Zealand have shown, doing that – coupled with other policy changes – can make a real difference.

The pay-off for higher taxes

Increasing tobacco taxes costs relatively little, but yields a high impact.

In our study[2] of six Asia-Pacific countries, we found that for every unit of local currency invested in increasing tobacco taxes, the countries would gain between 20 and 1,057 units in return over 15 years. That’s a remarkable return on investment ratio of between 20:1 and 1,057:1.

One direct benefit is a substantial increase in government revenue. In Cambodia[3] alone, the projected additional government revenue would be US$230 million over five years from the recommended levels of tobacco tax increases.

And it would be pro-poor, pro-development, and pro-women.

Who would benefit most?

Smoking is responsible for nearly half[4] of the difference in death rates between wealthy and poor people, meaning measures that reduce smoking disproportionately benefit poor people.

People with low incomes – both men and women – are more likely to use tobacco than their wealthier counterparts. In Myanmar, for example, 41% of men and 4% of women in the lowest income group smoke, compared with 25% of men and 0.4% of women in the highest group.

It is true that tax increases initially make the low earners who don’t cut back worse off, but over time the health gains[5] to low earners become more important.

Although the reductions in smoking-related deaths from higher taxes are concentrated in men, the financial benefits appear to flow to women.

As smokers quit, household budgets become easier, facilitating what a study in the British Medical Journal describes as an income transfer[6] from male smokers to females and other family members.

Lower smoking rates also protect female non-smokers from exposure to second-hand smoke at home and work.

How the Philippines became an Asia-Pacific leader

In the Philippines, half of the excise tax collected from tobacco products and sugar-sweetened beverages, and 80% of the excise tax collected from alcohol and vaping products is used to fund healthcare services.

The remaining 20% of alcohol and vaping excise revenue is allocated to social development, while 5% of tobacco excise tax revenue is earmarked to support tobacco farmers, including to help them switch crops.

Among its many reforms, the Philippines also instituted a whole-of-public sector code of conduct to prevent tobacco industry interference in its public policymaking.

Between 2012 and 2015, substantial tax increases in the Philippines cut cigarette sales by 28% and cut the number smokers by 3 million, with the largest reductions among the poorest parts of the population[7].

Yet despite the Philippines’ example and the clear benefits of significant tobacco tax increases, tobacco tax rates in most low income countries remain low. On average, tax accounts for only 19%[8] of the retail price of cigarettes in low-income countries, compared to 51% in high-income countries.

Higher taxes, fewer smokers in Australia & NZ

Among other Asia-Pacific nations, Australia’s rate of tobacco excise has climbed from 19 cents per cigarette in 1999 to A$1.16[9], and will climb again by 5% per year[10] for each of the next three years in addition to normal indexation.

Over that time the proportion of Australians aged 14 and over who smoke daily has plummeted from 22% to 11%[11]. The Australian government says it wants to get it below 10% by 2025 and to 5%[12] by 2030.

Aotearoa New Zealand has gone even further with its “Smokefree 2025” policy[13], with a goal that by 2025, fewer than 5% of New Zealanders will be smokers. This strategy includes banning the sale of tobacco products to anyone born after Jan 1, 2009.

The NZ government increased the tobacco excise tax by inflation plus 10% each year between 2010 and 2020. Decades of efforts in tobacco control, including tobacco taxation, have resulted in smoking rates declining from 36% in 1976[14] to 13% in 2020[15].

Read more: New Zealand is introducing law to create a smokefree generation. Here are 6 reasons to support this policy[16]

Even smokers back higher tax – if it goes to health

Higher taxes on cigarettes are overwhelmingly supported by non-smokers.

60% of smokers in a US survey backed higher tax if it’s used for healthcare. Shutterstock

But a US study has found that when the extra tax revenue is directed to healthcare programs, they are also overwhelmingly supported by smokers: 60% of those surveyed, up from 25% if the extra revenue is unallocated.

The tax gap between rich and poorer countries might be partly due to myths such as that increasing tobacco taxes

  • disproportionately hurts poor people,

  • leads to massive job losses, and

  • substantially diminishes government revenue.

Our policy brief[17] debunks these myths with evidence.

Read more: NZ's smokefree law will reduce the number of tobacco retailers – here's what people who smoke think of that[18]

Economic stress is brewing in many Asia-Pacific countries, with many under unprecedented pressure from stagnating revenue and growing needs for spending on health, education and social protection.

The United Nations’ Human Development Index[19] has declined for two consecutive years for the first time since data became available.

These extraordinary circumstances offer an extraordinary opportunity to act decisively. Taxation on tobacco and other harmful products should be one of them.

* This article was co-authored with Kazuyuki Uji, Policy Specialist, Health and Inclusive Development, United Nations Development Programme Bangkok Regional Hub.

References

  1. ^ our recent research (www.undp.org)
  2. ^ our study (www.undp.org)
  3. ^ In Cambodia (www.undp.org)
  4. ^ nearly half (documents1.worldbank.org)
  5. ^ health gains (www.adb.org)
  6. ^ income transfer (www.bmj.com)
  7. ^ poorest parts of the population (www.researchgate.net)
  8. ^ 19% (tobacconomics.org)
  9. ^ A$1.16 (www.ato.gov.au)
  10. ^ 5% per year (www.health.gov.au)
  11. ^ 11% (www.aihw.gov.au)
  12. ^ 5% (www.health.gov.au)
  13. ^ “Smokefree 2025” policy (www.smokefree.org.nz)
  14. ^ 36% in 1976 (tobaccocontrol.bmj.com)
  15. ^ 13% in 2020 (www.health.govt.nz)
  16. ^ New Zealand is introducing law to create a smokefree generation. Here are 6 reasons to support this policy (theconversation.com)
  17. ^ policy brief (www.undp.org)
  18. ^ NZ's smokefree law will reduce the number of tobacco retailers – here's what people who smoke think of that (theconversation.com)
  19. ^ Human Development Index (hdr.undp.org)

Read more https://theconversation.com/how-raising-tobacco-taxes-can-save-lives-and-cut-poverty-across-the-asia-pacific-197912

The Times Features

The Benefits of Animal-Assisted Speech Therapy For Children

Speech therapy has long been a standard for supporting children’s communication and emotional development. But what happens when you introduce a furry friend into the process? Th...

The Hidden Dangers of Blocked Drains and the Ultimate Solution for a Hassle-Free Home

Drain blockages are a big hassle to every homeowner and business owner alike. Whether it is a sink in the kitchen or bathroom, a clogged toilet, or a foul smell circulating aroun...

Understanding the Dangers of Ignoring a Gas Leak

Gas leaks are silent threats lurking within both homes and workplaces. A gas leak occurs when natural gas or any other gaseous substance escapes from a pipeline or containment. T...

Can You Sell Your House Privately in Queensland? Here’s How

Selling a house privately in Queensland is entirely possible and can be a cost-effective alternative to using a real estate agent. While agents provide valuable expertise, their co...

Itinerary to Maximize Your Two-Week Adventure in Vietnam and Cambodia

Two weeks may not seem like much, but it’s just the right time for travelers to explore the best of Vietnam and Cambodia. From the bustling streets of Hanoi to the magnificent te...

How to Protect Your Garden Trees from Wind Damage in Australia

In Australia's expansive landscape, garden trees hold noteworthy significance. They not only enhance the aesthetic appeal of our homes but also play an integral role in the local...

Times Magazine

CWU Assistive Tech Hub is Changing Lives: Win a Free Rollator Walker This Easter!

🌟 Mobility. Independence. Community. All in One. This Easter, the CWU Assistive Tech Hub is pleased to support the Banyule community by giving away a rollator walker. The giveaway will take place during the Macleod Village Easter Egg Hunt & Ma...

"Eternal Nurture" by Cara Barilla: A Timeless Collection of Wisdom and Healing

Renowned Sydney-born author and educator Cara Barilla has released her latest book, Eternal Nurture, a profound collection of inspirational quotes designed to support mindfulness, emotional healing, and personal growth. With a deep commitment to ...

How AI-Driven SEO Enhancements Can Improve Headless CMS Content Visibility

Whereas SEO (search engine optimization) is critical in the digital landscape for making connections to content, much of it is still done manually keyword research, metatags, final tweaks at publication requiring a human element that takes extensiv...

Crypto Expert John Fenga Reveals How Blockchain is Revolutionising Charity

One of the most persistent challenges in the charity sector is trust. Donors often wonder whether their contributions are being used effectively or if overhead costs consume a significant portion. Traditional fundraising methods can be opaque, with...

Navigating Parenting Arrangements in Australia: A Legal Guide for Parents

Understanding Parenting Arrangements in Australia. Child custody disputes are often one of the most emotionally charged aspects of separation or divorce. Parents naturally want what is best for their children, but the legal process of determining ...

Blocky Adventures: A Minecraft Movie Celebration for Your Wrist

The Minecraft movie is almost here—and it’s time to get excited! With the film set to hit theaters on April 4, 2025, fans have a brand-new reason to celebrate. To honor the upcoming blockbuster, watchfaces.co has released a special Minecraft-inspir...

LayBy Shopping