Tobacco Free Initiative (TFI)

Other economic issues in tobacco control


Comprehensive tobacco control measures, especially those demand-reduction measures such as higher taxes, advertising and promotion bans, smoking bans in public places and helping those who wish to quit, are effective in reducing tobacco usage and, consequently, tobacco attributable deaths and diseases. However, governments have been reluctant to implement strong tobacco control policies because of fears that this might have a negative impact on the economy, particularly on the poor smokers and employees in the tobacco manufacturing, agriculture and retail sectors.

For example, taxation has proved to be the most cost-effective measure in reducing the tobacco burden. However, the burden of tax increases on poor smokers is often used as an argument against tax increases. From the income perspective, higher taxes will likely increase the share of income spent on tobacco, creating big opportunity costs on families' immediate needs such as education and health expenditures. When evaluated from a broader perspective, tobacco control is not only effective but also has positive impacts on the poor, society and the economy. That is because a substantial portion of the world's tobacco consumers are poor, and the poor suffer more from the burden of tobacco-attributable diseases and deaths. Given the higher price sensitivity among the poor, as taxes increase, it is more likely that the poor will quit or reduce the quantity of tobacco consumption. Consequently, while a tax in itself can be seen as regressive, a tax increase can be progressive as it becomes an incentive for poorer populations to stop using tobacco. Moreover, reducing tobacco consumption will help to create a virtuous cycle. In the mid to long run, as smokers gain their health, better health will improve the social and economic development of countries. Social development will be achieved especially when the tobacco-attributable inequities in vulnerable populations are eliminated. For this, an equity lens needs to be applied to all tobacco control measures. Given the link between tobacco use and poverty, tobacco control should also be evaluated from a development perspective and be included in country national strategies for development.