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The third edition of the Tobacconomics Cigarette Tax Scorecard is out today with disappointing results. Tobacco taxes remain underutilized by governments despite being the most effective strategy to discourage consumption. Specifically, only 12% of the world’s population is covered by adequate tobacco tax policies. This means that most of the 183 Parties of the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) lack sufficient tobacco taxation (learn more about the FCTC in the Global Strategy chapter).
The Scorecard evaluates the strength of tobacco tax systems on a scale of 0 to 5 points on four measures using the latest WHO data from 2022 and other key data sources: price, change in affordability, tax share of price, and tax structure (learn more in the Taxes chapter). Countries are awarded the maximum 5 points on these components if they align their policies with evidence-based best practices.
Unfortunately, the global average score in 2022 dropped to only 1.99 points out of 5, reversing the modest progress from 1.89 points in 2014 to 2.25 points in 2020. Since the second edition of the Scorecard which uses 2020 data, tobacco tax policies became less effective in 76 countries and only improved in 31 countries. This is reflected in the concerning trends in smoking prevalence, with some countries experiencing an increase in the number of smokers and/or total consumption (learn more in the Prevalence chapter).
This regression in the overall average score is largely the result of a decrease in the affordability change score. As countries are undergoing post-pandemic economic recovery, which has sometimes included rapid growth and inflation, cigarette taxes are not keeping up and cigarettes are remaining affordable and accessible. Cigarettes have even become more affordable in many places around the world, including the region of Europe on average. Low prices and affordability increase the likelihood that youth and other vulnerable groups begin to smoke, threatening to undo progress on tobacco control over the last several decades (learn more in the Youth chapter).
There is significant room for improvement in the other three components as well. Many countries maintain a less than optimal complex tiered tax structure, rely only on an ad valorem tax rather than a more optimal specific or hybrid tax, or do not have an excise tax on cigarettes at all. Furthermore, cigarette prices decreased on average from 2020 to 2022 globally. There was some encouraging progress among low-income countries, as average prices increased by 10%, although prices remain the lowest in poorer countries. The average tax share of price increased as well. Still, the total and excise tax shares remain below the minimum benchmarks of 75% and 70%, respectively, in most countries.
These findings highlight the urgent need to strengthen tobacco tax systems globally in response to the tobacco epidemic, as it remains one of the leading causes of preventable death (learn more in the Deaths chapter). Policy makers have an opportunity to reduce both public health and fiscal tobacco-related harms with more effective taxation policies outlined in the Scorecard.
The third Cigarette Tax Scorecard can be found at: https://tobacconomics.org/research/cigarette-tax-scorecard-3rd-edition/