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Tobacco Tax

Stop Smoking: It’s Deadly and Bad for the Economy

Higher taxes on tobacco products reduce tobacco consumption and improve public health, while also increasing government revenues that can be used to fund priority investments and programs that benefit the entire population.

http://www.worldbank.org/en/news/infographic/2017/05/31/stop-smoking-its-deadly-and-bad-for-the-economy

WBG_NoTobaccoDay_Infographic_052417-Final

Tobacco kills 7 million a year, wreaks environmental havoc: WHO

Smoking and other tobacco use kills more than seven million people each year, the World Health Organization said Tuesday, also warning of the dire environmental impact of tobacco production, distribution and waste.

http://www.timeslive.co.za/world/2017/05/30/Tobacco-kills-7-million-a-year-wreaks-environmental-havoc-WHO

The UN agency said tougher measures were needed to rein in tobacco use, urging countries to ban smoking in the workplace and indoor public spaces, outlaw marketing of tobacco products and hike cigarette prices.

“Tobacco threatens us all,” WHO chief Margaret Chan said in a statement.

“Tobacco exacerbates poverty, reduces economic productivity, contributes to poor household food choices, and pollutes indoor air,” she said.

In a report released ahead of World No Tobacco Day on Wednesday, WHO warned that the annual death toll of seven million people had jumped from four million at the turn of the century, making tobacco the world’s single biggest cause of preventable death.

And the death toll is expected to keep rising, with WHO bracing for more than one billion deaths this century.

“By 2030, more than 80 percent of the deaths will occur in developing countries, which have been increasingly targeted by tobacco companies seeking new markets to circumvent tightening regulation in developed nations.”

Tobacco use also brings an economic cost: WHO estimates that it drains more than $1.4 trillion (1.3 trillion euros) from households and governments each year in healthcare expenditures and lost productivity, or nearly two percent of the global gross domestic product.

In addition to the health and economic costs linked to smoking, the WHO report for the first time delved into the environmental impact of everything from tobacco production to the cigarette butts and other waste produced by smokers.

“From start to finish, the tobacco life cycle is an overwhelmingly polluting and damaging process,” WHO Assistant Director-General Oleg Chestnov said in the report.

The report detailed how growing tobacco often requires large quantities of fertilisers and pesticides, and it warned that tobacco farming had become the main cause of deforestation in several countries.

This is largely due to the amount of wood needed for curing tobacco, with WHO estimating that one tree is needed for every 300 cigarettes produced.

WHO also highlighted the pollution generated during the production, transport and distribution of tobacco products.

The report estimates that the industry emits nearly four million tonnes of carbon dioxide equivalent annually — the same as around three million transatlantic flights.

And waste from the process contains over 7,000 toxic chemicals that poison the environment, including human carcinogens, WHO said.

Once in the hands of the consumer, tobacco smoke emissions spewed thousands of tonnes of human carcinogens, toxic substances and greenhouse gases into the environment.

Cigarette butts and other tobacco waste make up the largest number of individual pieces of litter in the world, the agency said.

Two thirds of the 15 billion cigarettes sold each day are thrown on to the street or elsewhere in the environment, it said, adding that butts account for up to 40 percent of all items collected in coastal and urban clean-ups.

WHO urged governments to take strong measures to rein in tobacco use.

“One of the least used, but most effective tobacco control measures… is through increasing tobacco tax and prices,” Chestnov said.

Tobacco is a deadly threat to global development

Dr Margaret Chan, Director-General of WHO

http://who.int/mediacentre/commentaries/2017/tobacco-threat-development/en/

When I reflect on my tenure as Director-General of the World Health Organization, there are many areas where the agency played its unique role as the guardian of health for all people.

But I am especially proud of our work to fight tobacco use, something that I have personally championed since 2007.

Tobacco is a deadly product that kills more than 7 million people every year, and costs the global economy more than US$ 1.4 trillion annually in healthcare expenditure and lost productivity.

Tobacco control will play a major part in meeting the Sustainable Development Goal target of reducing premature deaths from noncommunicable diseases by one-third by 2030.

But tobacco control is about more than preventing deadly cancers, heart diseases and respiratory diseases. In addition to posing a serious threat to health, tobacco use also threatens development in every country on every level and across many sectors — economic growth, health, education, poverty and the environment — with women and children bearing the brunt of the consequences.

The theme for this year’s World No Tobacco Day, on 31 May, is “Tobacco – a threat to development”. This year, WHO will launch a new report that highlights the great harm to the environment inflicted by tobacco growing, manufacturing, trade and consumption. For example, growing and producing tobacco uses 4.3 million hectares of land resulting in deforestation of 2-4%, and the pesticides and fertilizers used in tobacco growing can be toxic and pollute water supplies. Tobacco manufacturing produces over 2 million tonnes of solid waste each year. Up to 10 billion cigarettes are disposed in the environment every day. Cigarette butts account for 30-40% of all litter collected in coastal and urban clean-ups.

Tobacco farming also stops children from attending school and exposes them to hazardous chemicals. Children in tobacco-growing families often miss class because they are needed to work in the tobacco fields. Women are also disproportionately at risk of chemical exposure, as they make up 60-70% of the tobacco farming workforce.

Tobacco use hits the poorest people the hardest and exacerbates poverty. Spending on tobacco products often represents more than 10% of total household income – meaning less money for food, education and health care. Some 80% of the premature deaths attributable to tobacco use occur in low- or middle-income countries. These countries bear almost 40% of the global US$ 1.4 trillion cost of smoking from health expenditures and lost productivity.

Fortunately, we have powerful tools to fight the tobacco epidemic. The WHO Framework Convention on Tobacco Control (WHO FCTC), the first international treaty negotiated under the auspices of WHO, provides governments with clear, legally binding measures that they can introduce to reduce the harm caused by tobacco use. These include banning advertising, promotion and sponsorship of tobacco, effectively warning about the harmful effects of tobacco use, implementing tax or price policies and protecting people from exposure to second-hand tobacco smoke.

In line with WHO’s FCTC, WHO’s MPOWER measures support countries to reduce demand for tobacco, using methods that are practical, low-cost and high-impact. Tobacco taxation is a powerful tool for saving lives. Taxes reduce smoking rates and help government raise revenues to improve health and promote development. Increasing tobacco taxes and prices is one of the most effective, yet least utilized control measures globally. By increasing cigarette taxes worldwide by US$1, an extra US$ 190 billion could be raised for development.

We need to make sure that countries know that this tool exists and how to use it. Ministers of health are convinced by the evidence, and I ask them to be vocal in persuading ministers of finance, trade, foreign affairs and others not to be swayed by the unsubstantiated arguments of the tobacco industry.

Many countries have already shown tremendous progress in reducing tobacco use. Our challenge now is to help more countries follow suit, and to fight the efforts of the tobacco companies to hinder or counter progress that has been made by countries implementing strong measures.

Everyone can help play a role in stamping out tobacco and promoting development at the same time. People can commit to never take up tobacco products or to seek help to quit the habit. Governments can strengthen implementation of the WHO FCTC.

The tobacco industry is a vector of one of the greatest threats our society faces. It takes courage to antagonize powerful economic operators. If we fail to accept this responsibility, we will never make sufficient progress in health and development.

WHO stands ready to help governments introduce innovative approaches to tackle tobacco use. We have taken off our gloves and entered the ring on the side of the countries working to advance tobacco control, and we are going to fight tobacco tooth and nail.

If we rise to the challenge of beating tobacco by adopting measures that reduce demand for this deadly product, we can promote a healthier, more sustainable world.

World No Tobacco Day 2017: Why Does It Matter?

World No Tobacco Day 2017 focuses on the links between tobacco use, tobacco control, and sustainable development. Does this mean that tobacco use is more than a public health issue? The answer is an emphatic yes, rooted in robust scientific evidence accumulated over the past five decades and country experiences worldwide. Let me explain.

http://blogs.worldbank.org/health/world-no-tobacco-day-2017-why-does-it-matter

While tobacco products are legal goods offered in the marketplace, their consumption, particularly cigarette smoking, is highly addictive, toxic, and deadly. Nicotine (a chemical in tobacco), tar (a partially combusted particulate matter produced by the burning of tobacco), and carbon monoxide (a colorless, odorless gas produced from the incomplete burning of tobacco) activate multiple biological pathways through which smoking increases risk for diseases of nearly all organs of the body. The WHO just released this week jarring new data – 7 million people a year are killed by smoking and other tobacco use each year, up from 4 million people at the turn of the century. Smokers who begin early in adult life and do not stop smoking face a three-fold higher risk of death compared to comparable non-smokers, resulting in a loss of at least one decade of life.

If global development is lifting lives within and among countries, it should be clear to all of us that ill health, premature death, and disability caused by tobacco use is a major obstacle to supporting the achievement of healthy, educated, productive, prosperous, socially engaged, and happy people. It also undermines economic development, as the total economic cost of smoking is estimated to exceed US$ 1.4 trillion per year, equivalent to 1.8% of the world’s annual gross domestic product (GDP).

So what can be done to further strengthen the global effort to deal with this development challenge?

This year’s World No Tobacco Day offers an opportunity for governments and societies across the world to recommit to implement strategies and plans that prioritize action on tobacco control, building upon ongoing efforts and achievements. The accelerated implementation of all demand-reduction measures, such as regulations to provide protection from exposure to tobacco smoke in public places, and to prohibit misleading tobacco packaging and labelling, as well as price and tax measures, along with raising public awareness of tobacco control issues, outlined in WHO’s Framework Convention on Tobacco Control (FCTC) since 2005 has already contributed to the decrease in smoking prevalence in 126 countries from 24.7% in 2005 to 22.1% in 2015. While all the interventions included in the FCTC need to be fully implemented, tobacco taxation demands increased attention and effort, as its implementation lags behind. Around the world, cigarette prices remain too low to discourage consumption. Only 33 countries impose taxes that constitute more than 75% of the retail price of a pack of cigarettes—the taxation level recommended to deter consumption.

Since price plays an important role in smoking and cigarette taxes play an important role in cigarette prices, raising taxes on tobacco products is one of the most cost-effective measures to reduce tobacco use, especially in low- and middle-income countries (LMICs) where smokers are more price-sensitive. Due to the addictive nature of tobacco products, more than just focusing on quantity of cigarettes consumed, particular attention needs to be placed on examining the impact of prices on smoking initiation, especially among children and adolescents, on quit attempts, and on the fraction of the population that smokes.

In redoubling the tobacco taxation effort, it is important to keep in mind that the positive impacts of higher tobacco taxes that lead to higher prices and reduced consumption extend well beyond direct health gains and indirect benefits such as higher productivity and reduced health care expenditures. As recognized in a recent publication by the International Monetary Fund (IMF), “In many countries, raising tobacco taxes can offer a “win–win”: higher revenue and positive health outcomes…. Of course, countries putting more weight on health objectives could raise taxes even further than the revenue maximizing point.”

Country experiences provide strong evidence that increasing tobacco taxes can contribute to accelerate domestic resource mobilization in line with the objectives set forth in the 2015 Financing for Development Addis Ababa Action Agenda. This is important, as augmenting a country’s tax base is critical to expand the fiscal capacity of governments to fund priority investments and programs, such as universal health coverage, education, safe water and basic sanitation, and road safety, to help countries achieve the Sustainable Development Goals (SDGs) by 2030.

On this World No Tobacco Day, those of us working at the World Bank Group should also reaffirm our commitment to “walking the walk and not only the talk” to help countries control the development threat posed by tobacco use. The unambiguous Operational Directive 4.76 of 1999 mandates that the World Bank Group does not lend directly to tobacco production, processing, or marketing; provide grants for investment in these activities; or guarantee investments, loans, or credits for these industries. World Bank Group policy advice and technical assistance support tobacco tax increases to protect the population from health risks and to mobilize additional fiscal revenue.

To advance the tobacco control agenda into the future, we should be guided by the realization that taxing tobacco is not only good for public health, but it is a fundamental policy measure that is necessary to help countries grow and develop for the benefit of the entire population.

Saudi to impose tobacco, sugary drinks tax on June 10

Saudi Arabia will impose a special tax on tobacco and sugary drinks on June 10, as part of a series of steps towards closing a budget deficit caused by low oil prices.

http://www.reuters.com/article/us-saudi-tax-idUSKBN18O0OA

Khalid Khurais, director of the selective tax unit of the General Authority of Zakat and Tax, told Al Arabiya television on Sunday that rules covering the tax were published in the official gazette last week and would take effect after 15 days.

Officials have said they expect to raise between 8 billion and 10 billion riyals ($2.1 billion to $2.7 billion) annually from the tax, which will comprise a 50 percent levy on soft drinks and 100 percent on tobacco and energy drinks.

The tax marks a big change in policy for Riyadh, which has traditionally kept taxation minimal but now plans a series of levies and fees by 2020 to close a budget gap that totalled 297 billion riyals last year. Next January it plans to impose a 5 percent value-added tax, a much bigger revenue-generating step.

The other countries in the six-nation Gulf Cooperation Council have also agreed to impose the tax on tobacco and sugary drinks, and are expected to do so in coming months.

(Reporting by Andrew Torchia; Editing by Stephen Powell)

Smokers Undeterred as Bills Keep Rising

Since the beginning of the past fiscal year (ended in March) the taxes collected on tobacco products are paid to the Health Ministry (50%), Education Ministry (25%) and Ministry of Sports and Youth Affairs (25%) for anti-smoking campaigns

https://financialtribune.com/articles/people/65335/smokers-undeterred-as-bills-keep-rising

Iranians spend $1-1.5 million (40 to 50 billion rials) on tobacco products each day and the cost of treating tobacco-related disease is almost three times more than the amount spent on tobacco consumption.

During the past five years, the rate of tobacco consumption has only slightly decreased, studies conducted by the Health Ministry indicate. The rate is still high among adolescents and young people (the peak age for first trying of smoking has decreased from 13 to 10). The figure has also increased dramatically compared to the past decade, the Persian language weekly ‘Salamat’ reported.

“In 2006, Iranians smoked 50 billion cigarettes (worth $33.3 million). The figure reached 60-70 billion cigarettes in 2016,” said Dr Mohammadreza Madani, head of the Iranian Anti-Tobacco Association (IATA).

Another concern is the high prevalence of hookah (water pipe) for smoking flavored tobacco among young people. One hour of smoking hookah exposes a smoker 100-fold to the amount of smoke inhaled from a single cigarette. Even those people around a hookah smoker inhale smoke equal to 10 cigarettes.

Every year on May 31, the WHO marks World No Tobacco Day (WNTD), highlighting the health and additional risks associated with tobacco use, and advocating effective policies to reduce tobacco consumption.

The theme for World No Tobacco Day 2017 is ‘Tobacco – a threat to development.’

But irrespective of the programs to create awareness on the harmful effects of smoking, statistics show that 14-15% of Iranians from the 80 million population are regular cigarette smokers (more than 3% are women, and 20% men).

“Though most of the cigarette smokers are men, hookah smoking doesn’t vary by gender; 21.3% of women and 21.7% of men are hookah smokers,” Madani said.

Dodging Taxes

Iran is one of the nations that has signed the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), by which a country is committed to reduce the rate of tobacco consumption every year (by implementation of both price and tax measures as well as non-price measures to reduce demand for tobacco).

Pointing to Article 8 of the National Comprehensive Law on Tobacco Control, Madani said, “According to the law passed in 2006, every year taxes on cigarettes should be increased by 10%.”

“However, there have been always obstacles in its implementation. For example, in 2010 the figure decreased to 5% due to ‘manipulative tactics’ by the powerful tobacco lobby. Tobacco producers said that high taxes on cigarettes would lead to an increase in cigarette smuggling, and thus managed to reduce the tax.”

However, in January this year, lawmakers passed cigarette and tobacco tax slabs to be implemented under the sixth five-year economic development plan (2017-22).

Based on the new law, the tax slab on locally-produced tobacco and cigarettes is 10%; for local brands jointly produced by domestic and foreign manufacturers, it is 20%; for domestically produced cigarettes with foreign brand names the slab is 25%; and for imported cigarettes and tobacco, it is 40%.

Lawmakers also mandated the Ministry of Industries, Mining and Trade to announce the retail prices of cigarettes and all tobacco products to the relevant authorities for taxation purposes and for printing the tax rates on cigarette packs.

“Since the beginning of the past fiscal year (ended in March) the taxes collected on tobacco products are paid to the Health Ministry (50%), Education Ministry (25%) and Ministry of Sports and Youth Affairs (25%). The Education Ministry is required to spend the money on increasing students’ awareness of harms associated with tobacco smoking,” Madani said.

Earlier, the tax money was given to the ministries of health and sports and youth affairs.

Facts About Tobacco

There are more than 7 million deaths from tobacco use every year, a figure that is predicted to cross 8 million by 2030 without effective and intensified action. Tobacco consumption is a threat to any person, regardless of gender, age, race, cultural or educational background. It brings suffering, disease, and death, impoverishing families and national economies.

Tobacco use costs national economies enormously through increased healthcare costs and decreased productivity. Some 80% of premature deaths from tobacco occur in low- or middle-income countries, which face increased challenges to achieving their development goals, the WHO website reports.

Tobacco growing requires large amounts of pesticides and fertilizers, which can be toxic and pollute water supplies. Each year, tobacco growing uses 4.3 million hectares of land, resulting in global deforestation between 2% and 4%. Tobacco manufacturing also produces over 2 million tons of solid waste.

By increasing cigarette taxes worldwide by $1, an extra $190 billion could be raised for development. High tobacco taxes contribute to revenue generation for governments, reduce demand for tobacco, and offer an important revenue stream to finance development activities.

Higher tobacco prices are an effective preventative measure

Thirty percent of the estimated 2.3 million smokers in Austria are considered to be heavily tobacco-dependent and, according to experts at MedUni Vienna, require professional treatment. This would mean around 690,000 people. According to Michael Kunze, an expert on smoking at the Center for Public Health at MedUni Vienna, an effective strategy would be to increase the price of tobacco products: “If the price of cigarettes were to rise just one percent above the inflation rate, that would bring about a 0.5% reduction in consumption worldwide.”

https://medicalxpress.com/news/2015-05-higher-tobacco-prices-effective.html

“At MedUni Vienna we were among the first to suggest solving this problem via a pricing strategy and to provide scientific evidence to back this up,” explains Kunze on the occasion of World No Smoking Day this coming Sunday (31 May). However, this strategy would only make sense if it were to be implemented throughout Europe or within the European Union (EU). A cohesive policy is required because, at the moment, the completely different pricing policies in the various EU countries are getting in the way.

Making effective nicotine replacement treatments more accessible

At the same time, the social medicine experts at MedUni Vienna are calling for an effective programme of nicotine replacement therapy, similar to the methadone programme for heroin addicts. Although treatment options are available, they bear the stigma of being a drug treatment. “Many smokers say they do not want to take drugs, because they do not feel ill. If the replacement therapies were available without prescription, in pharmacies for example, the programme would work much better,” stresses Kunze, citing the example of the Swedish programme with the air-dried chewing tobacco “Snus”, whereby the nicotine finds its way into the bloodstream via the oral mucosa.

“Snus” is less damaging to health because it does not give rise to any toxins, such as those produced by burning tobacco during smoking. Kunze: “The prevalence of lung cancer has dropped by 50% in Sweden as a result.” International studies have shown that consuming smokeless tobacco is up to 95% less harmful than smoking. However, with the exception of Sweden, the commercial sale of “Snus” is banned in the EU, even though it is not illegal to buy it, if you are aged 18 or over.

Smoking cessation brings benefits after only a few days

The possible negative consequences of long-term tobacco consumption are clearly evidenced: tobacco consumption is the single biggest cause of illness and premature death in Europe: around 90% of deaths from lung cancer are caused by smoking and the same applies to 75% of deaths from chronic bronchitis and other respiratory diseases. Moreover, cigarette smoking is implicated in the development of pancreatic, kidney and cervical cancer.

It has also been proven that positive effects can occur very soon after quitting: “Even just a few days after the last cigarette, the risk of cardiovascular disease falls rapidly. Smoking practically constitutes carbon monoxide poisoning so, if you stop, you stop poisoning yourself,” says Kunze. However, the cancer risk remains elevated for many years afterwards.
Read more at: https://medicalxpress.com/news/2015-05-higher-tobacco-prices-effective.html#jCp

Reduction in tobacco taxes to be a disaster: PIMA

Doctors resent government’s plan to make smoking ‘easier’

https://www.thenews.com.pk/print/206442-Reduction-in-tobacco-taxes-to-be-a-disaster-PIMA

Reacting to a statement made by the Special Assistant to the PM on Revenue, who has expressed that high taxes on cigarettes encourage smuggling which, in turn, costs billions to the exchequer, the president of Pakistan Islamic Medical Association (PIMS) Wednesday suggested that if such a cause and effect relationship is logical, then the government should bring heroin, hashish and other menaces in the open market as a commercial commodity as well, and earn huge income through taxes.

“The government should be ashamed for increasing the prices of basic commodities like bread, fruits, milk, petrol, electricity, etc. and reducing the prices of dangerous items like tobacco,” the PIMA chief stated. He pointed out that Pakistan has one of the largest populations of tobacco users in the world, with over 22 million adults smoking cigarettes, ‘huqqa’ or ‘biri’ and millions more using smokeless tobacco products, including ‘gutka,’ ‘naswar,’ and ‘paan.’ Over 100,000 deaths are attributed to tobacco use each year from lung and oral cancers, strokes, heart and respiratory diseases.

Research has shown that increase in tobacco prices leads to a decrease in the number of smokers in a given community, one of the most effective of many strategies to curb tobacco use. “Here, our government is going to do exactly the opposite: make it easier to buy cigarette. While it may not matter for the richer strata of the society, even a small price increase matters a lot for the poor and lower middle class. It is this group unfortunately that is farthest away from any sort of health education, health care and economic benefits when it comes to illness that inevitably stems from tobacco use,” the PIMA president pointed out.

A research study on tobacco taxation in Pakistan, conducted jointly by FBR, World Bank, University of Toronto, Johns Hopkins University, University of Illinois at Chicago, and Beaconhouse National University, concluded that a uniform specific excise tax of Rs31.2 per pack of 20 cigarettes, could reduce overall cigarette consumption by 7.5 per cent, increase tax revenues by Rs27.2 billion, leading to over half a million users quitting and reducing premature deaths among current adult smokers by over 180,000, while also preventing 725,000 youth from taking up smoking.

Only a week ago, the Minister of State for Health Saira Afzal had recommended an increase in the Federal Excise Duty on lower slab of all brands of cigarettes from the current Rs32.98 to Rs44 per pack of 20 cigarettes.

UAE imposes heavy taxes on tobacco and fizzy drinks

DUBAI: The UAE Ministry of Finance has announced a selective tax of 100 percent on tobacco and energy drinks and 50 percent on carbonated beverages on Tuesday.

https://www.geo.tv/latest/143063-uae-imposes-heavy-taxes-on-tobacco-and-fizzy-drinks

It was announced in a tweet of UAE Ministry of Finance after the meeting of the board directors of Federal Tax Authority (FTA) that was chaired by Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.

It is also stated that new taxes will be applied in the fourth quarter of this year.

International transportation, commodities and exports, health and education services, gold imported for investment purposes are exempted from taxes.

Last year, UAE President Shaikh Khalifa had issued a decree setting up the Federal Tax Authority (FTA) which is responsible for setting up and maintaining records on taxpayers and taxes paid. The authority will also issue guidelines and clarifications to taxpayers on matters related to federal taxes and related fines.

The UAE would also implement tax over the next few years including a Gulf Cooperation Council -wide VAT tax, which will start in 2018.

The list of items that will come under new taxation system would be utility bills (water, electricity, internet), tobacco, soft and energy drinks, watches, electronics, entertainment, smartphones, jewelry and luxury cars.

The UAE expects revenue through only tobacco products alone to be Dh2 billion annually.

Cigarette tax hike takes effect June 20th

The price of cigarettes will increase by NT$20 (US$0.6) per pack starting on June 20th

http://www.taiwannews.com.tw/en/news/3160480

The Ministery of Finance announced Thursday that the price of cigarettes will increase by NT$20 (US$0.6) per pack starting on June 20th, after the Legislature passed the third and final reading of an amendment to the Tobacco and Alcohol Tax.

The amendment raises the cigarette tax from NT$590 per 1,000 cigarettes (per kilogram) to NT$1,590, which translates into a tax per packet of NT$31.8, up from the current NT$11.8.

The increase will generate NT$23.3 billion in additional tax revenue per year, which will be used to fund the long-term care program for seniors, according to the Finance Ministry.

Finance Minister Sheu Yu-jer said earlier this year that he believed the policy would also help curb tobacco consumption and promote public health.