Investigating the Effects of Tax on Cigarette Smoking: Evidence From ۵۸ Countries

Background: One of the most essential requirements for economic and political developmentand stability is considering the health of the society. Annually, about ۱۳% of people worldwidedie because of smoking (use of tobacco). Tax is a price tool to reduce tobacco use; however,the effectiveness of tax on smoking may vary according to the socio-economic status ofdifferent societies. This study investigates the effects of four components of absolute price(AP), affordability change (AC), tax share (Sh), and tax structure (St) on the percentage ofsmokers at a global level.Materials and Methods: This investigates the data provided by the Tobacconomics team,including four components on tobacco use. A total of ۵۸ countries were selected and analyzedbased on data availability. Since data for some countries was not available for some years,۲۰۱۸ (most of the data for this year is available) was considered the reviewed year. Crosssectional data have been used to estimate the model. This study uses the ordinary least squaresregression for the model.Results: The results showed that AP and tax did not affect the percentage of smokers in thesample countries; however, St had a negative impact on smoking, while AC had a positiveand significant effect on the number of smokers. Also, smoking increased due to increasingpoverty. As a result, the price alone did not affect the percentage of smokers, but the relativeand AC became important in smoking. In addition, St affected smoking more than tax.Conclusion: The estimation results of the model showed that Sh had no significant effecton the percentage of smokers. Meanwhile, Sh had no reducing impact on the percentage ofsmokers. In addition, increasing Sh can lead to an increase in cigarette smuggling. The resultsshowed that tax alone cannot be a factor in reducing smoking; however, a suitable St can beconsidered an essential factor in reducing smoking. Hence, countries should focus more on thestructure of the tax system than on the tax rate or revenue.