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April 18th, 2016:

Major health, development and economic gains from tobacco tax increases

A study finding published by the World Health Organization recently reveals that tobacco tax increases can prevent millions of smoking-attributable deaths throughout the world and contribute to the achievement of global health objectives.

The study points out that tobacco tax increases can provide the fiscal resources needed to finance development priorities, particularly in low and middle income countries.

According to the researchers, raising cigarette excise by USD $.80 per pack in all countries would impact;

The average retail price of cigarettes to increase by 63 percent in low income countries, 25 percent in high income countries and 42 percent globally;

The adult daily smoking rate to decrease by 9 percent;

Fifteen million fewer smoking attributable deaths among the adults who were alive in 2014. Most of the deaths averted would be in low and middle income countries;

The amount of cigarette excise revenue generated globally would increase by 47 percent, generating an extra US$ 141 billion in revenue.

The WHO Framework Convention on Tobacco Control (FCTC) Article 6 and its guidelines obligate Parties to adopt and implement tobacco price and tax policies that will reduce demand of tobacco products.

The WHO study was conducted to investigate the potential for tobacco taxation to contribute to the 2030 agenda for sustainable development by reducing tobacco use, saving lives and generating tax revenue.

The researchers developed a simulation model of the global cigarette market using data for 181 countries that together represented 98 percent of the world’s smokers.

The model projects the impacts of excise tax increases on retail cigarette prices, cigarette excise revenue, the rate of daily cigarette smokers, and the future number of smoking-attributable deaths averted among adults globally in 2014.

Source of information: Campaign for Tobacco-Free Kids, USA

Taxing tobacco and the new vision for financing development

As part of the 2016 World Bank Group-International Monetary Fund Spring Meetings held this past week in Washington, D.C., a fascinating panel discussion, A New Vision for Financing Development, took place on Sunday, April 17. Moderated by Michelle Fleury, BBC’s New York business correspondent, it included World Bank Group President Jim Yong Kim, Bill Gates, Justine Greening (UK Secretary of State for International Development), Raghuram Rajan (Governor of the Reserve Bank of India), and Seth Terkper (Minister for Finance and Economic Planning of Ghana).

The panel was in consensus about the current challenging economic and social environment facing the world as a whole. That environment includes low rates of economic growth across the world, drastic reductions in the price of commodities that are impacting negatively low-and middle-income countries, rising inequality, frequent natural disasters and pandemics, increased number of displaced populations and refugees due to conflict and violence spilling across national borders and continents, and the ambitious United Nations 2030 Agenda for Sustainable Development, which includes a set of 17 Sustainable Development Goals (SDGs). A question debated in the panel was, Where will the resources be found to address these challenges? This question is critical under the current scenario if countries are to continue to build on the progress achieved over the last decade and maintain previous gains.

Gates noted that new and innovative tools are required alongside the promotion, adoption, and adaptation of good practices to make a difference in dealing with these challenges. Terkper advocated for maintaining official development assistance commitments and adopting flexible risk-sharing financial instruments by multilateral organizations to help countries attract and leverage private investment. The importance of investing in the development of healthy and productive populations as key engines of economic and social development over the medium and longer terms was stressed by Kim, who argued that many governments have to be convinced to invest in “soft sectors” — health, nutrition, and education — compared to the “hard sectors” — roads, ports, and energy infrastructure.

While international financial assistance is necessary to help countries translate into reality the vision for a world free of extreme poverty, where there is opportunity for all, it should be recognized, as observed by Rajan, that domestic resources depend in large measure on economic growth. Growth, in turn, is supported by an enabling economic, social, and environment policy environment, including counter-cyclical fiscal policies, adequate fiscal space, and good governance. But, as highlighted by Greening, national governments must recognize that in accordance with the Financing for Development Addis Ababa Action Agenda adopted in July 2015, the active mobilization and effective use of domestic resources, underscored by the principle of national ownership, are central to the common pursuit of sustainable development.

If development is lifting up lives, and new and innovative approaches for funding development are seen as “game changers,” then I would argue that the development community needs to redouble its commitment to advocate with national governments and society at large for raising taxes on tobacco products. Taxing tobacco is one of the most cost-effective measures to reduce consumption of products that kill prematurely, make people ill with all kinds of tobacco-related diseases (e.g., cancer, heart disease, respiratory illnesses), and cost health systems enormous amounts of money for treating often preventable diseases. In addition, hiking tobacco taxes can help expand a country’s tax base to mobilize needed public revenue to fund vital investments and essential public services that benefit the entire population and help build the human capital base of countries, such as financing the progressive realization of universal health coverage and mental health scale-up as well as education for all and early childhood development initiatives. Indeed, data from different countries indicate that the annual tax revenue from excise taxes on tobacco can be substantial (e.g., close to 1% of GDP or $3 billion in the Philippines in 2015).

We at the World Bank, in partnership with the Bill & Melinda Gates Foundation and Bloomberg Philanthropies, as well as World Health Organization, are already working and committed to support countries in the design and implementation of tobacco taxation policy measures and monitoring their health and fiscal revenue impact, as a critical element of the global development agenda. The time has arrived to make tobacco taxation an important source of domestic resource mobilization that has the potential to generate substantial health and social welfare dividends across the world.

Effects of plain package branding and graphic health warnings on adolescent smokers in the USA, Spain and France



The purpose of this study is to provide an experimental test of the effects of plain pack branding and graphic health warnings (GHWs) in three different countries for an important and vulnerable population, that is, adolescents who are experimenting with smoking.


The effects of plain pack branding (logo present, logo absent), and graphic visual warning level (absent, low, medium, high) are studied experimentally for their impact on adolescent cigarette craving, evoked fear, pack feelings and thoughts of quitting in the USA, Spain and France. A total of 1066 adolescents who were experimenting with smoking served as participants in the study. A quota sample produced 375 respondents in the USA, 337 in Spain and 354 in France.


Overall findings indicate that the GHWs were effective in impacting adolescent cigarette craving, evoked fear, pack feelings and thoughts of quitting. The plain pack effects were not as strong, yet reduced craving, increased fear, and decreased pack feelings for all three samples combined, and for US adolescent smokers individually, irrespective of the GHWs. For French adolescent smokers, plain pack effects for craving were limited to low/moderate GHW levels. For Spanish adolescent smokers, plain pack feeling effects were limited to the absence of the GHWs.


The results show that plain packs can independently strengthen the more instantaneous, direct effects (short of quitting thoughts) found with the GHWs. Yet, the plain pack results were attenuated for Spanish and French adolescent smokers, who are currently exposed to GHWs.