In March 2007, Mongolia started to divert a proportion of its tobacco tax revenue towards a new health promotion foundation. This followed a tobacco control law that required that the foundation be established “to enhance healthy lifestyles and reduce tobacco consumption among the population.”

In the debate leading up to the new law, it was reported that “some of the lawmakers insisted that the excise tax on tobacco should be accumulated in a national fund to fight hazards of tobacco and be used for anti-smoking advertising campaigns.”

While the amount of funds for the new foundation are modest—2% of the tobacco tax revenue, or around US$180 000 per year—it represents a fairly rare move for a developing country. Only a few other such countries dedicate any of their tobacco tax revenue to health related purposes—Estonia, Poland, Egypt, Thailand, Korea, Taiwan and Qatar. All these have higher per capita incomes than Mongolia.

Despite this progressive move, Mongolia still has plenty of scope for improved tobacco control. A recent survey in 2005 indicated that smoking prevalence was currently 43.1% for men and 4.1% for women. In particular, there is a need to further raise the overall level of tobacco tax, which, including value added tax and customs duty, is only around 40% of the price paid by the smoker. Without higher excise taxes, tobacco will continue to be relatively cheap owing to Chinese imports and Mongolia’s own domestic products.

There is also scope in Mongolia for improving compliance with the current smoke-free environments law that limits smoking to designated areas. There may even be a need for a new smoke-free law that is more comprehensive, with complete restrictions on smoking in all public places and hospitality venues.