Our colleagues explored the effect of cigarette taxation on Slovak demand and tax revenue, as part of their involvement in the Tobacconomics program.
Among the main findings of their research can be regarded the following:
- Increase in cigarette prices proportional to the growing living standards, measured in total household consumption, appears to be inevitable to avoid further proliferation of the amount of cigarette packs sold;
- There still appears to be ample of room for increasing excise duties before any negative effects manifest on the amount of tax revenue collected;
- Despite expected relative decrease of the total cigarette demand caused by the increase of the excise duty, it is very likely that only a small portion of this change results from the increase in the number of non-smokers;
- Complex attitude towards tobacco excise duties may present an appropriate approach for avoiding substitution of cigarettes with alternative tobacco products;
Further information:
- policy brief https://lnk.sk/ptfv
- detailed underlying analysis in English https://lnk.sk/jybx
