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Basic economic gap related to smoking: reconciling tobacco tax receipts and economic costs of smoking-attributable diseases
  1. Petr David
  1. Correspondence to Petr David, Department of Accounting and Taxes, Faculty of Business and Economics, Mendel University in Brno, Brno 61300, Czech Republic; david{at}mendelu.cz

Abstract

Background Tobacco tax rates set by various governments are not based on the idea that tax receipts should cover the costs incurred by smoking. It can be assumed that tobacco tax receipts (TTR) differ from the costs of smoking. The aim is to determine the global basic economic gap (BEG) between TTR and the economic costs of smoking-attributable diseases (ECS).

Methods BEG is described as the difference between the ECS and TTR. A total of 124 countries representing 94% of global tobacco consumption were included in the research by means of the creation of a database, the adjustment of input data and the identification of their intersection.

Results The global BEG reaches US$1438 billion per year. The global ECS are US$1911 billion per year. The global TTR are US$473 billion per year and compensate for only one quarter of the ECS. Within countries with the highest consumption of cigarettes, especially the USA but also Russia and Germany, the proportion of the ECS covered by the TTR is even lower, although private health expenditures have been taken into account.

Conclusions Our findings suggest that tobacco taxes would have to be globally increased by more than four times on average in order to cover the ECS or between two and two-and-a-half times if we take private health expenditures into account. The informational pressure concerning health risks associated with smoking aimed at reducing harmful consumption and improving global health can also be supported with these economic facts.

  • taxation
  • economics
  • global health

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Footnotes

  • Contributors The sole author and person responsible for the calculations made and results published in the present text is PD. No other contributors were engaged in the work related to the text.

  • Funding The author has not declared a specific grant for this research from any funding agency in the public, commercial or not-for-profit sectors.

  • Competing interests None declared.

  • Patient consent Not required.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Data sharing statement The data used are secondary, and their sources are always cited in the text and listed in the References. The tables with data and calculations may also be attached and published.

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