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Smoking costs China $57 billion in 2014: WHO calls for national ban

The economic dividends from China’s tobacco industry are a false economy, which is at odds with government’s vision for China’s future, the World Health Organization (WHO) claimed on Friday.

http://www.ecns.cn/2017/04-16/253586.shtml

“The total economic cost of tobacco use in China in 2014 amounted to a staggering 350 billion yuan ($57 billion), a tenfold increase since 2000,” Bernhard Schwartlander, the WHO representative in China, told a press conference in Beijing.

The increase is a result of more people diagnosed with tobacco-related illness and increasing healthcare expenditure, according to a report jointly released by the WHO and the United Nations Development Program (UNDP) at the conference.

“The direct cost of treating tobacco-related diseases in China was about 53 billion yuan and the indirect cost was expected to be 297 billion yuan,” in which the productivity loss from premature deaths was a major concern, according to the report.

Meanwhile, the report said that tobacco represents an economy of the past as China’s tobacco companies do not fit the vision of an innovative, value-added future economy.

“Projected increases in these costs will lead to negative spillovers effects across many sectors, placing increasing challenges to Chinese economy and businesses, in addition to the social welfare and health system,” it said.

Wu Yiqun, deputy director of the Beijing-based Research Center for Health Development, a think tank, told the Global Times earlier that China has huge public support for a nationwide smoking ban, but the timetable to adopt a law has been on the back burner.

“The proposed law has been mainly stymied by tobacco industry officials due to the huge economic interests involved,” Wu said.

The sector handed over 1.1 trillion yuan ($170 billion) to the State in 2015, up 20.2 percent from the previous year, the State Tobacco Monopoly Administration said in 2016.

The revenue from the tobacco industry derives from corporations whose business model is to create dependence on a lethal substance.

China in 2016 adopted the “Healthy China 2030″ blueprint, which says China aims to reduce smoking rates among adults from 28 percent to 20 percent by 2030.

More than 1 million people die of tobacco-related diseases every year in China, and the number is expected to reach 3 million by 2050 if no action to reduce smoking rates is taken. About 44 percent of the world’s cigarettes were consumed in China in 2014, nearly 26 percent higher than that in India, the report said.

China’s Ministry of Finance announced in May 2015 to raise cigarette taxation from the previous 5 percent to 11 percent, which “led to a reduction in cigarette sales for the first time in 20 years,” according to the report.

However, “cigarettes are increasingly affordable as the increase in cigarette prices has been much lower than the average increase in salaries.”

Smoking Will Kill 200 Million In China This Century, Report Says

The country is the world’s largest producer and consumer of tobacco.

http://www.huffingtonpost.com/entry/smoking-will-kill-200-million-in-china-this-century-report-says_us_58f26221e4b0da2ff8612b55

Habitual smoking in China is set to kill more than 200 million people this century, a new report from the World Health Organization and United Nations Development Program said.

The deaths will come from primarily poor areas of the country, “unless critical steps are taken to reduce China’s dependency on tobacco,” the report, released Friday, said.

Those steps could be difficult in a country that is also the world’s largest producer and consumer of tobacco, according to WHO. Forty-four percent of the world’s cigarettes are smoked in China, and the profits show. In 2015, the smoking industry in China recorded $160 billion in revenue, according to Agence France-Presse.

Dr. Bernhard Schwartländer, China’s WHO representative, said there needs to be more smoke-free policies across the country.

“If nothing is done to reduce these numbers and introduce more progressive policies, the consequences could be devastating not just for the health of people across the country, but also for China’s economy as a whole,” Schwartländer said.

Cigarettes have become increasingly more affordable, according to the report. A 50 percent tax increase on cigarettes could see 47 million fewer male smokers and 20 million fewer premature deaths over 50 years.

“Raising tobacco taxes is one of the most cost-effective measures to reduce tobacco consumption, while also generating substantial revenue for health and other essential programs – investments that ultimately benefit the entire population,” said Bert Hofman, World Bank Country Director for China, Mongolia and Korea, in the WHO press release.

Smoking causes one in ten deaths globally, major new study reveals

Efforts to control tobacco have paid off, says study, but warns tobacco epidemic is far from over, with 6.4m deaths attributed to smoking in 2015 alone

https://www.theguardian.com/society/2017/apr/05/smoking-causes-one-in-ten-deaths-globally-major-new-study-reveals

One in 10 deaths around the world is caused by smoking, according to a major new study that shows the tobacco epidemic is far from over and that the threat to lives is spreading across the globe.

There were nearly one billion smokers in 2015, in spite of tobacco control policies having been adopted by many countries. That number is expected to rise as the world’s population expands. One in every four men is a smoker and one in 20 women. Their lives are likely to be cut short – smoking is the second biggest risk factor for early death and disability after high blood pressure.

The researchers found there were 6.4m deaths attributed to smoking in 2015, of which half were in just four populous countries – China, India, USA, and Russia.

Major efforts to control tobacco have paid off, according to the study published by the Lancet medical journal. A World Health Organisation treaty in 2005 ratified by 180 countries recommends measures including smoking bans in public places, high taxes in cigarettes and curbs on advertising and marketing.

Between 1990 and 2015, smoking prevalence dropped from 35% to 25% among men and 8% to 5% among women. High income countries and Latin America – especially Brazil which brought in tough curbs on tobacco – achieved the biggest drops in numbers of smokers.

But many countries have made marginal progress since the treaty was agreed, say the authors of the study from the Institute of Health Metrics and Evaluation at the University of Washington in the US. And although far more men smoke than women, there have been bigger reductions in the proportions of men smoking also, with minimal changes among women.

Senior author Dr Emmanuela Gakidou said there were 933m daily smokers in 2015, which she called “a very shocking number”. The paper focused only on those who smoke every day. “The toll of tobacco is likely to be much larger if we include occasional smokers and former smokers and people who use other tobacco products like smokeless tobacco. This is on the low end of how important tobacco is,” she told the Guardian.

There is much more that needs to be done, she said. “There is a widespread notion that the war on tobacco has been won but I think our evidence shows that we need renewed and sustained efforts because the toll of smoking in 2015 is much larger than most people would think, so we absolutely have a lot more to do. We need new and improved strategies to do it and a lot of effort and political will.”

Traditionally there have been far fewer women smoking around the world than men, but it was a huge problem for both, she said.

“There are some really worrisome findings – for example in Russia female smoking has increased in the last 25 years significantly. There are also some western European countries where about one in three women are smoking. So it is true globally that a lot fewer women smoke than men but there are some countries where it is a big problem for women,” she said.

Dr Kelly Henning of Bloomberg Philanthropies, which is committed to tobacco control and co-funded the study with the Bill and Melinda Gates Foundation, said: “I think the study highlights the fact that the work is not finished on tobacco. The good news is the decline in daily smoking among men and women … however there are still many smokers in the world and there is still a lot of work to do. I think we have to keep our eye on the issue and really do more.”

Countries with some of the highest death tolls such as China and Indonesia “really don’t need those health problems – they have so many other issues they are trying to address. But tobacco control is critically important in those places,” she said.

“China has more than a million deaths a year from smoking related diseases and China is only beginning to see the effects of their high male smoking rate. That is only one instance of what is expected to become an extremely major epidemic,” she said.

Writing in a linked comment, Professor John Britton from the University of Nottingham said: “Responsibility for this global health disaster lies mainly with the transnational tobacco companies, which clearly hold the value of human life in very different regard to most of the rest of humanity.” British American Tobacco, for instance, sold 665bn cigarettes in 2015 and made a £5.2bn profit.

“Today, the smoking epidemic is being exported from the rich world to low-income and middle-income countries, slipping under the radar while apparently more immediate priorities occupy and absorb scarce available human and financial resources,” he writes. “The epidemic of tobacco deaths will progress inexorably throughout the world until and unless tobacco control is recognised as an immediate priority for development, investment, and research.”

Smoking prevalence and attributable disease burden in 195 countries and territories, 1990–2015

Smoking prevalence and attributable disease burden in 195 countries and territories, 1990–2015: a systematic analysis from the Global Burden of Disease Study 2015

http://thelancet.com/journals/lancet/article/PIIS0140-6736(17)30819-X/fulltext?elsca1=tlpr

Summary

Background

The scale-up of tobacco control, especially after the adoption of the Framework Convention for Tobacco Control, is a major public health success story. Nonetheless, smoking remains a leading risk for early death and disability worldwide, and therefore continues to require sustained political commitment. The Global Burden of Diseases, Injuries, and Risk Factors Study (GBD) offers a robust platform through which global, regional, and national progress toward achieving smoking-related targets can be assessed.

Methods

We synthesised 2818 data sources with spatiotemporal Gaussian process regression and produced estimates of daily smoking prevalence by sex, age group, and year for 195 countries and territories from 1990 to 2015. We analysed 38 risk-outcome pairs to generate estimates of smoking-attributable mortality and disease burden, as measured by disability-adjusted life-years (DALYs). We then performed a cohort analysis of smoking prevalence by birth-year cohort to better understand temporal age patterns in smoking. We also did a decomposition analysis, in which we parsed out changes in all-cause smoking-attributable DALYs due to changes in population growth, population ageing, smoking prevalence, and risk-deleted DALY rates. Finally, we explored results by level of development using the Socio-demographic Index (SDI).

Findings

Worldwide, the age-standardised prevalence of daily smoking was 25·0% (95% uncertainty interval [UI] 24·2–25·7) for men and 5·4% (5·1–5·7) for women, representing 28·4% (25·8–31·1) and 34·4% (29·4–38·6) reductions, respectively, since 1990. A greater percentage of countries and territories achieved significant annualised rates of decline in smoking prevalence from 1990 to 2005 than in between 2005 and 2015; however, only four countries had significant annualised increases in smoking prevalence between 2005 and 2015 (Congo [Brazzaville] and Azerbaijan for men and Kuwait and Timor-Leste for women). In 2015, 11·5% of global deaths (6·4 million [95% UI 5·7–7·0 million]) were attributable to smoking worldwide, of which 52·2% took place in four countries (China, India, the USA, and Russia). Smoking was ranked among the five leading risk factors by DALYs in 109 countries and territories in 2015, rising from 88 geographies in 1990. In terms of birth cohorts, male smoking prevalence followed similar age patterns across levels of SDI, whereas much more heterogeneity was found in age patterns for female smokers by level of development. While smoking prevalence and risk-deleted DALY rates mostly decreased by sex and SDI quintile, population growth, population ageing, or a combination of both, drove rises in overall smoking-attributable DALYs in low-SDI to middle-SDI geographies between 2005 and 2015.

Interpretation

The pace of progress in reducing smoking prevalence has been heterogeneous across geographies, development status, and sex, and as highlighted by more recent trends, maintaining past rates of decline should not be taken for granted, especially in women and in low-SDI to middle-SDI countries. Beyond the effect of the tobacco industry and societal mores, a crucial challenge facing tobacco control initiatives is that demographic forces are poised to heighten smoking’s global toll, unless progress in preventing initiation and promoting cessation can be substantially accelerated. Greater success in tobacco control is possible but requires effective, comprehensive, and adequately implemented and enforced policies, which might in turn require global and national levels of political commitment beyond what has been achieved during the past 25 years.

Funding

Bill & Melinda Gates Foundation and Bloomberg Philanthropies.

Smoking prevalence and attributable disease burden in 195 countries and territories, 1990–2015

Smoking prevalence and attributable disease burden in 195 countries and territories, 1990–2015: a systematic analysis from the Global Burden of Disease Study 2015

http://thelancet.com/journals/lancet/article/PIIS0140-6736(17)30819-X/abstract

Summary

Background

The scale-up of tobacco control, especially after the adoption of the Framework Convention for Tobacco Control, is a major public health success story. Nonetheless, smoking remains a leading risk for early death and disability worldwide, and therefore continues to require sustained political commitment. The Global Burden of Diseases, Injuries, and Risk Factors Study (GBD) offers a robust platform through which global, regional, and national progress toward achieving smoking-related targets can be assessed.

Methods

We synthesised 2818 data sources with spatiotemporal Gaussian process regression and produced estimates of daily smoking prevalence by sex, age group, and year for 195 countries and territories from 1990 to 2015. We analysed 38 risk-outcome pairs to generate estimates of smoking-attributable mortality and disease burden, as measured by disability-adjusted life-years (DALYs). We then performed a cohort analysis of smoking prevalence by birth-year cohort to better understand temporal age patterns in smoking. We also did a decomposition analysis, in which we parsed out changes in all-cause smoking-attributable DALYs due to changes in population growth, population ageing, smoking prevalence, and risk-deleted DALY rates. Finally, we explored results by level of development using the Socio-demographic Index (SDI).

Findings

Worldwide, the age-standardised prevalence of daily smoking was 25·0% (95% uncertainty interval [UI] 24·2–25·7) for men and 5·4% (5·1–5·7) for women, representing 28·4% (25·8–31·1) and 34·4% (29·4–38·6) reductions, respectively, since 1990. A greater percentage of countries and territories achieved significant annualised rates of decline in smoking prevalence from 1990 to 2005 than in between 2005 and 2015; however, only four countries had significant annualised increases in smoking prevalence between 2005 and 2015 (Congo [Brazzaville] and Azerbaijan for men and Kuwait and Timor-Leste for women). In 2015, 11·5% of global deaths (6·4 million [95% UI 5·7–7·0 million]) were attributable to smoking worldwide, of which 52·2% took place in four countries (China, India, the USA, and Russia). Smoking was ranked among the five leading risk factors by DALYs in 109 countries and territories in 2015, rising from 88 geographies in 1990. In terms of birth cohorts, male smoking prevalence followed similar age patterns across levels of SDI, whereas much more heterogeneity was found in age patterns for female smokers by level of development. While smoking prevalence and risk-deleted DALY rates mostly decreased by sex and SDI quintile, population growth, population ageing, or a combination of both, drove rises in overall smoking-attributable DALYs in low-SDI to middle-SDI geographies between 2005 and 2015.

Interpretation

The pace of progress in reducing smoking prevalence has been heterogeneous across geographies, development status, and sex, and as highlighted by more recent trends, maintaining past rates of decline should not be taken for granted, especially in women and in low-SDI to middle-SDI countries. Beyond the effect of the tobacco industry and societal mores, a crucial challenge facing tobacco control initiatives is that demographic forces are poised to heighten smoking’s global toll, unless progress in preventing initiation and promoting cessation can be substantially accelerated. Greater success in tobacco control is possible but requires effective, comprehensive, and adequately implemented and enforced policies, which might in turn require global and national levels of political commitment beyond what has been achieved during the past 25 years.

Funding

Bill & Melinda Gates Foundation and Bloomberg Philanthropies.

Cancer Activists Push Bill to Hike Legal Age to Buy Tobacco

Over 100 cancer patients, survivors and their families from across Massachusetts are planning to gather at the Statehouse to press lawmakers to support efforts to protect young people from nicotine addiction.

http://www.capecod.com/newscenter/cancer-activists-push-bill-to-hike-legal-age-to-buy-tobacco/

At the top of the agenda is a bill that would increase the legal age to buy tobacco products from 18 to 21.

The legislation would also include e-cigarettes in the smoke-free workplace law and ban the sale of tobacco products in facilities that provide health care, such as pharmacies.

About 95 percent of adults who smoke started by age 21.

More than 140 communities in the Commonwealth have passed regulations raising the purchase age from 18 to 21, including Falmouth, Mashpee, Yarmouth, Brewster, Orleans, Eastham and Provincetown.

The Board of Health in Harwich will hold a public hearing April 11 to discuss a proposed regulation change to increase the legal age to 21. The board could vote on the measure that night.

Wednesday’s visit to Beacon Hill is part of the American Cancer Society Cancer Action Network’s annual lobby day.

This year, an estimated 37,000 Massachusetts residents will be diagnosed with cancer. An estimated 12,600 will die from the disease.

Progress against ‘global tobacco epidemic’ made but not enough

Tobacco treaty has helped cut smoking rates, yet more work is needed

http://www.timesofmalta.com/articles/view/20170325/health-fitness/Progress-against-global-tobacco-epidemic-made-but-not-enough.643389

The WHO warns against tobacco use which kills about six million people a year globally and imposes a huge burden on the world economy.

A global tobacco treaty put in place in 2005 has helped reduce smoking rates by 2.5 per cent worldwide in 10 years, researchers said, but use of deadly tobacco products could be cut even further with more work on anti-smoking policies.

In a study published in the Lancet Public Health journal, researchers from Canada’s University of Waterloo and the World Health Organisation (WHO) found that while progress against what they called the “global tobacco epidemic” has been substantial, it has still fallen short of the pace called for by the treaty.

The WHO Framework Convention on Tobacco Control (FCTC), which came into effect in 2005, obliges the 180 countries signed up to have high tobacco taxes, smoke-free public spaces, warning labels, comprehensive advertising bans and support for stop-smoking services.

Smoking causes lung cancer and is a major risk factor for cardiovascular illnesses such as heart disease and strokes, which kill more people than any other diseases.

The WHO says tobacco kills about six million people a year globally and imposes a huge burden on the world economy. Annual healthcare and lost productivity costs for those made ill from smoking are estimated at around $1 trillion.

The study analysed WHO data from 126 countries – 116 of which are signatories to the FCTC – and tracked and compared the implementation of the five key measures from 2007 to 2014 to look at links between strong policies and smoking rates.

It found that, on average, smoking rates dropped to 22.2 per cent in 2015 from 24.7 a decade earlier. But the trends varied, with rates falling in 90 countries, rising in 24 and remaining steady in 12.

Countries that fully implemented more FCTC measures saw significantly greater reductions in smoking rates, the study found. Overall, each additional measure was linked with a drop in smoking rates of 1.57 percentage points – corresponding to 7.1 per cent fewer smokers in 2015 compared with in 2005.

The study was not a full global analysis, since only 65 per cent of countries had the data needed, but it did include countries from all income levels and regions. The researchers also noted that the lower smoking rates could be influenced by factors other than FCTC policy recommendations.

“The data did not allow a detailed analysis of the impact of individual policies,” said Geoffrey Fong of Waterloo University, who co-led the work.

He called for more studies that are specifically designed to evaluate the impact of all FCTC policies and would “help provide guidance to countries about what policies may offer the greatest benefits”.

Is tobacco bill really necessary?

Last week we learned that President Joko “Jokowi” Widodo verbally rejected a proposal from lawmakers for a new tobacco bill that would increase protection of the industry and production of cigarettes. However, he finally gave written agreement for discussion by government and the legislature about the proposed law.

http://www.thejakartapost.com/academia/2017/03/24/is-tobacco-bill-really-necessary.html

Smoking and the tobacco industry have long been big business here with well documented impacts on national, family and individual economies, health and welfare. Today I call on activists concerned for the people of Indonesia to reject the proposed tobacco law, which threatens the health and well-being of our people. It is in conflict with prevailing laws on health and other fields.

We must also raise our voices to point to positive action that the government can take to address some key concerns of the President — an increase in revenues and the welfare of tobacco farmers and workers in the cigarette industry.

A review of some basic facts about smoking and tobacco in Indonesia makes clear the importance of acting promptly.

Among the country’s 255 million people, an estimated 65 percent of adult males are regular smokers, making Indonesia the second-largest cigarette market in Asia after China. Furthermore, in Indonesia the rate of smoking among women has increased rapidly in recent years. This threatens not only the health of these women, but that of their babies and children. Smoking while pregnant increases the risk of miscarriage, low birth weight and respiratory problems in children after birth.

A child growing up with a mother or father or both smoking is at risk in multiple ways. Children’s health may be permanently affected by second-hand smoke in the house. Furthermore children may associate smoking with “being adult” and rush to start smoking themselves leading to early, long-term addiction.

Finally, the households of smokers, particularly low-income families, live with cruel competition for family funds between expenditure on cigarettes and expenditure on good nutrition, clothing, school books and basic medical care. Research shows that it is often the basic needs that lose out — a punishment for the whole family that falls particularly hard on children who are building bones, brains and muscles.

As a pediatrician I would like all parents to be disciplined, caring and active in promoting the best possible life chances for each of their children. Yet science and global experience make clear that the addictive nature of cigarette smoking, peer-group pressure among young people and alluring cigarette advertising makes it easy to start lighting up. Later, smokers find it difficult or impossible to shake the habit.

Therefore I argue not only against the proposed bill.

I also suggest four important actions that could eventually help reduce the threat of smoking to people’s health, thus reducing individual and health expenditure, increase revenue, improve the situation of tobacco farmers and help cigarette factory workers.

First, accede to the Framework Convention on Tobacco Control (FCTC). This global public health treaty aims to reduce tobacco-related causes of ill health and death through cutting legal and illegal supply and demand for tobacco, and protection of health and the environment from tobacco-related damage. Having been adopted by 180 of the 193 UN member states, Indonesia is one of only 13 which is not yet a party to the convention.

Second, increase revenues from tobacco and smoking. The expansion of cigarette production and sales in the proposed bill is presented in terms of expansion of employment opportunities and income for the government.

Yet this increase can be achieved without the bill by increasing the price of a pack of cigarettes (20 sticks), now at US$ 1.40, among the world’s lowest. A significant increase in price will automatically increase revenues from taxes and excises, which benefits the national and regional levels.

Increasing the price would both raise revenue and reduce smoking among the young and the poor -meaning lower treatment costs of tobacco-related diseases.

Third, protect and develop tobacco farmers. Since independence, Indonesia has worked to improve its citizens’ productivity, health services and welfare. There is already a law for the protection and empowerment of farmers (Law No. 19/ 2013). Presidential or other government regulations with special focus could fully meet the needs of tobacco farmers.

Also urgent are special efforts to support farmers wanting to transit out of tobacco farming but without the resources for the startup investment, including training, equipment, seeds etc.

Fourth, protect and attend to the welfare of cigarette factory workers. Similar to farmers, there are laws and regulations that could be used to address their special needs as the industry evolves. And it is clear that even if the cigarette industry expands production in line with the proposed law, it would not expand employment, given the industry’s preference for the speed, efficiency and simplicity of mechanized production.

Layoffs of workers and the shift from hand-rolled cigarettes to mostly mechanized production is already well advanced – 75 percent of kretek (clove-based) cigarettes is now machine rolled. Thus the new law would unlikely provide any significant new employment or support for workers displaced by mechanization.

So is the proposed tobacco bill needed to raise revenues and protect agricultural and factory workers in the industry? No. If we are concerned about the people, their health and well-being, the proposed tobacco bill is clearly unnecessary!

***

The writer is presently leaders’ envoy and board chair for the Asia Pacific Leaders’ Malaria Alliance (APLMA). She served as health minister (2012-2014) and chair of the Global Fund to Fight AIDS, Tuberculosis and Malaria (2013–2015)

Calls to stub out tobacco deals

http://www.thestandard.com.hk/section-news.php?id=180992

Several legislators yesterday called on the government not to extend further concessions to the tobacco trade that is trying to further delay implementation of bigger graphic health warnings on cigarettes to the detriment of public health.

The government proposed in May 2015 to enlarge the size of health warnings to cover at least 85 percent of the packet or retail containers of cigarettes, saying the existing six graphic health warnings which cover half of packets or containers have been in use since 2007.

The Food and Health Bureau has made four concessions to meet the industry’s concerns, including using any background color to show nicotine and tar content and for the English version of the health warning to remain at 50 percent of the surface area of the lid of a drum-shaped container.

Undersecretary for Food and Health Sophia Chan Siu-chee told a Legislative Council health services panel yesterday that the government will also extend the adaptation period from six months to 12 months upon gazetting of the amendment order of the smoking ordinance.

Tourism-sector lawmaker Yiu Si- wing said: “The government is conceding, giving in to the tobacco sector’s pressure.”

The Labour Party’s Fernando Cheung Chiu-hung: “Public health should come first. Especially as I have had some personal health problems, I understand the value of health.

“I understand from the grassroots that smoking is a relief for them from stress but the government should not concede anymore. It has already conceded enough.”

Peter Shiu Ka-fai, of the wholesale and retail sector, questioned whether the government would have evidence to show that bigger warnings would mean “people will stop smoking?”

Wong Ting-kwong, of the import and export sector, said he is a smoker and that bigger warnings will still affect second- and third-hand smokers as “the smoke isn’t less.”

The panel also discussed the Hong Kong Code, a voluntary code aimed at protecting breastfeeding and to impose restrictions on formula milk marketing practices that give misconceptions about the nutritional value of products for children up to 36 months old.

Chan told the legislators: “We consulted the Department of Justice and the code is not breaching the competition law as this is voluntary.”

Tobacco Control Program

Context

Tobacco use, and its negative health, social and economic impacts, is a significant global health challenge.

http://www.worldbank.org/en/topic/health/brief/tobacco

According to the 2015 World Health Organization (WHO) Report on the Global Tobacco Epidemic, in 2013, 21% of adults globally were current smokers – 950 million men and 177 million women. Despite increasing global population between 2007 and 2013, smoking prevalence has actually declined worldwide from 23% in 2007, preventing an increase in the number of smokers in the world. The total remains at 1.1 billion smokers globally in 2013.

Tobacco use is a leading global disease risk factor and underlying cause of ill health, preventable death, and disability. It is estimated to kill more than 5 million people each year across the globe. If current trends persist, tobacco will kill more than 8 million people worldwide each year by 2030, with 80% of these premature deaths taking place in the developing world.

In 2015, the “Addis Ababa Action Agenda” adopted at the Third International Conference on Financing for Development held in Addis Ababa, Ethiopia — and later endorsed by the United Nations as part of the Sustainable Development Goals (SDGs) — recognized that public policies and mobilization, and effective use of domestic resources, underscored by the principle of national ownership, are central to the common pursuit of sustainable development, including achieving the SDGs.

Clause 32 of the Addis Ababa Action Agenda states that price and tax measures on tobacco are viewed as 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.

The Action Agenda also stresses that the tobacco tax agenda is fully consistent with obligations acquired by 180 countries that are parties to the WHO Framework Convention on Tobacco Control (FCTC) (an additional seven countries have signed the FCTC but have not ratified it, and only nine countries are neither signatories or parties to the FCTC).

World Bank Group Tobacco Control Program

The World Bank Group’s Tobacco Control Program assists selected countries in fostering and implementing tobacco tax reforms to achieve public health goals by reducing tobacco affordability and consumption, and controlling illicit trade on tobacco. Work is currently underway or being initiated in the Philippines, Indonesia, Senegal, Colombia, Botswana, Ethiopia, Armenia, Georgia, Liberia, and Lesotho; work in Ghana concluded. Initial discussions are taking place Ukraine, Nigeria, Moldova, China, India, Peru, and Tajikistan. In addition, the program aims to support knowledge exchange, including peer-to-peer advice and support, among selected countries on the economics of tobacco control (for example, through the Joint Learning Network, which includes more than 30 countries). The preparation of a Tobacco Taxation Module as part of WBG/IMF Tax Policy Assessment Framework (TPAF) is underway as part of a new WBG/IMF initiative launched ahead of the Financing for Development Conference in Addis Ababa, held in July 2015, to help member countries strengthen their tax systems. One of the pillars of the initiative includes the development of “improved diagnostic tools to help member countries evaluate and strengthen their tax policies.” Building on their collective expertise, the Bretton Woods Institutions (BWIs) aim to play a fuller role in enabling all of their member countries to assess tax policy performance in order to identify priority tax policy reforms, and design the requisite support for their implementation. The TPAF is a diagnostic framework to provide systematic and structured assessment of a country’s tax policy system, and to develop options for improving such system given a set of policy objectives.

More specifically, the program assists government agencies in developing capacity to assess the health and social costs of tobacco use, and design, enact, administer and monitor tobacco taxation policies. Enhanced capacity will enable countries to increase prices and reduce tobacco use, taking into account the macro-economic and fiscal situation of each country, tax laws, and existing tax administration structure and processes. This process includes assessments and discussions related to fiscal revenues and allocation; smoking patterns and taxes at country level; and socio-economic and health impacts of increasing tobacco tax rates, under different tax policy scenarios, and including impacts on employment, smuggling and other likely impacts of tobacco tax reforms.

The Bank team engaged in this program is multi-sectoral, and includes experts in health, governance, and macro-economics and financial management. Initial discussions are being held to mobilize knowledge and expertise from the International Monetary Fund’s Fiscal Affairs team. The Bank team is also working closely with other international partners, such as the World Health Organization and the Campaign for Tobacco-Free Kids.

The Bank’s Tobacco Control Program is implemented through a multi-donor trust fund financed by the Bill & Melinda Gates Foundation and the Bloomberg Philanthropies. These donors take part in governance of the trust fund and participate in the selection of priority countries included for support under the program.

Joint Learning Network Module: The Joint Learning Network (JLN), connects practitioners and policymakers across countries, facilitating peer-to-peer learning and sharing of knowledge and experience. As part of the Bank’s program, the network is currently developing a Tobacco Tax and Illicit Trade on Tobacco Module targeting member countries in Asia, Africa, Latin American and the Caribbean, and Europe, as well as a diverse group of international, regional, and local partners. The module is expected to focus on tobacco taxation, tax administration, and illicit trade control measures.

In 1991 the World Bank adopted a mandatory operational policy not to lend, invest in, or guarantee investments or loans for tobacco production, processing, or marketing. The Bank’s activities in the health sector discourage the use of tobacco products.

Why the emphasis on tobacco taxation?

Raising taxes on tobacco products is one of the most cost-effective measures to reduce consumption of products that increase mortality , while also generating substantial domestic revenue for health and other essential programs—investments that benefit the entire population. Given this, the World Bank Group Tobacco Control Program gives priority attention to tobacco taxation.

Findings in the 2015 WHO Report on the Global Tobacco Epidemic show that while only 33 countries impose taxes that constitute more than 75% of the retail price of a pack of cigarettes—the taxation level recommended to have an impact on consumption —most countries that do tax tobacco products have extremely low tax rates. And some countries do not have a special tax on tobacco products at all.

Given this situation, the World Bank Group’s program supports governments to look at accumulated country evidence and use tax measures to increase the retail price of tobacco products as one of the best available public health policy measures.

Some important lessons from international experience about how to effectively implement tobacco taxation policy to achieve public health objectives can be adopted and adapted in policy dialogue and operational support to countries. Such lessons include:

While nearly all countries tax tobacco products, an excise tax is the most important type of tobacco tax, since it applies uniquely to tobacco products and raises prices relative to prices for other goods and services.

Simpler tobacco tax structures are more effective than complex ones, since tiered tax structures are difficult to administer and can undermine the health and revenue impacts of tobacco excise taxes.

Use of specific excise taxes enhances the impact of tobacco taxation on public health by reducing price gaps between premium and lower-priced alternatives, which limits opportunities for users to switch to less-expensive brands in response to tax increases. Taxing all tobacco products comparably reduces incentives for substitution.

Ad valorem taxes are difficult to implement and weaken tax policy impact. Since they are levied as a percentage of price, companies have greater opportunities to avoid higher taxes and preserve or grow the size of their market by manufacturing and selling lower-priced brands. This also makes government tax revenues more dependent on industry pricing strategies and increases the uncertainty of the tobacco tax revenue stream.

Specific excise taxes need to be adjusted for inflation to remain effective.

Tax increases should reduce the affordability of tobacco products. In many countries, where incomes and purchasing power are growing rapidly, large price increases are required to offset growth in real incomes.

Strong tax administration is critical to minimize tax avoidance and tax evasion, to ensure that tobacco tax increases lead to higher tobacco product prices and tax revenues, as well as reductions in tobacco use and its negative health consequences.

Regional agreements on tobacco taxation can be effective in reducing cross-border tax and price differentials and in minimizing opportunities for individual tax avoidance and larger scale illicit trade.

For more information, please contact:

Patricio V. Marquez

Lead Public Health Specialist

World Bank Group Health, Population and Nutrition Global Practice

Email address: pmarquez@worldbank.org

Blanca Moreno-Dodson

Lead Economist

World Bank Group Macro Economics and Fiscal Management Global Practice

bmorenododson@worldbank.org