Higher tobacco taxes will save lives – new WHO Report
Beijing, 7 July 2015 - Raising tobacco tax is a proven, low-cost measure to curb demand for tobacco, save lives and generate new funds for building stronger health services. These are the key messages from the World Health Organization’s Report on the Global Tobacco Epidemic-2015, released in Manila today.
“Raising taxes on tobacco products is one of the most effective – and cost-effective – ways to reduce consumption of products that kill, while also generating substantial revenue,” says Dr Margaret Chan, WHO Director-General.
“I encourage all governments to look at the evidence, not the industry’s arguments, and adopt one of the best win-win policy options available for health,” Dr Chan said.
Currently, tobacco use kills more than 1 million people in China each year. The number of deaths each year will increase sharply without continued, determined action to reduce smoking rates in China. Raising tobacco taxes and prices can help to reverse this disturbing trend, especially when implemented alongside other tobacco control policies.
“When tobacco prices rise, consumption falls, along with smoking-related death and disease. The higher the taxes and prices, the bigger the health – and broader social and economic – benefits. And the more lives that will be saved,” said Dr Bernhard Schwartländer, WHO Representative in China.
“Higher taxes cost governments almost nothing to implement, but can generate vast amounts of additional revenue that can be invested back into health services. Raising tobacco tax is a textbook example of a win-win public health policy,” Dr Schwartländer said.
According to the WHO report, hundreds of studies from countries around the world have examined the impact of tobacco taxes and prices on tobacco use. In low- and middle-income countries, a 10% increase in the price of tobacco products can reduce tobacco smoking rates by as much as 8%.
The effects of tax increases are especially pronounced among young people who are among the most price-sensitive groups.
“Higher prices stop young people from taking up the deadly habit of smoking. Raising tobacco taxes is therefore a particularly important tool for helping young people avoid the hazards of tobacco addiction,” Dr Schwartländer said.
In May 2015, China’s Ministry of Finance announced an adjustment to tobacco taxation in China – an increase in the excise tax applied at the wholesale level, from 5% to 11%, and a new, specific excise tax of 0.005RMB per stick, or 0.1RMB per pack of 20 cigarettes.
While it will be some time before the real impact of the recent tax increase can be determined, according to WHO’s preliminary analysis retail prices of tobacco products in China can be expected to increase by 7-10%. The overall share of tax as a proportion of the market retail price of tobacco is likely to increase from 50% to approximately 54%. WHO expects this to have a modest but measurable impact on reducing total cigarette consumption.
“The recent tax increase announced by China’s Ministry of Finance is an important step in the right direction. Especially so when considered alongside other tobacco control progress – such as the Beijing smoke-free law, and new restrictions on tobacco advertising,” Dr Schwartländer said.
“Now, we must keep building on these very significant recent achievements – to turn around the tobacco epidemic in China, once and for all,” Dr Schwartländer concluded.
China is the world’s largest producer and consumer of tobacco products. There are more than 300 million smokers in the country – with 28.1% of adults, and more than half of all adult men, regular smokers. Among 13-15 year olds, 11.2% of boys smoke. Around 3000 people die from tobacco-related illness in China every day. In addition, over 700 million people are routinely exposed to second-hand smoke, which kills approximately 100,000 people every year.
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