Tax solutions for optimal reduction of tobacco use in West Africa
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Resumen
During the first phase of this project, numerous decision-makers were engaged and involved in discussions with the goal of establishing a new taxation system to reduce tobacco use in West Africa.Más información
During the first phase of this project, numerous decision-makers were engaged and involved in discussions with the goal of establishing a new taxation system to reduce tobacco use in West Africa. Although regional economic authorities (ECOWAS and WAEMU) are preparing to adopt new tobacco taxation guidelines, the lack of local evidence remains a major barrier to the implementation of national fiscal policies. As a result, decision-makers are ill-equipped to evaluate the potential effects of tax increases on their government's tax revenue and on public health, and to set objectives for reduced tobacco use. This study will estimate the costs of tobacco use in Senegal and show, for the first time, the extent of the chronic morbidity and the economic costs associated with tobacco use in a West African country. In addition, data on tobacco demand in Senegal and Nigeria (collected in 2015) will be used to determine the optimal taxation rates required to considerably reduce tobacco use in these two countries. Lastly, the study will assess the true economic contribution of the industry in a selection of West African countries, estimate the effects of increased taxes on illicit trade, and perform an in-depth analysis of the tax systems in these countries. These analyses will be used to develop concrete reforms that will overcome the barriers to implementing effective tobacco control measures in the various countries in the region. It is expected that by the end of the project, the introduction of excise duties and regular tax increases will be widely accepted, and more than half of the countries will reform their tax systems to integrate these measures and promote the health of their population.
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Resultados de la investigación Opens in new tab
Présenter la méthodologie qui sera appliquée dans l’évaluation des coûts des maladies liées au tabac au Sénégal
This policy brief reports on a study where a sample of 432 smokers in Nigeria and 315 smokers in Senegal was analysed to better understand the relationship between the effect of increasing the price of cigarettes on quitting smoking. Results show that these factors and their effects may differ depending on the country in which they are implemented. For instance, in Senegal, substituting a cheaper brand was seen as an alternative to quitting. The World Health Organization has developed a framework convention to help countries implement a range of measures to reduce tobacco use.
Results of the study show that excise tax development does not have the same implications for the two countries. The price elasticity of tobacco demand is very high in Senegal, in contrast to Nigeria. Increasing tobacco taxes in Senegal strongly reduces demand, but also causes a decrease in tax revenues. While increasing taxes causes a lesser decline in demand in Nigeria, it could create a sharp increase in the country’s tax revenues. There is a specific threshold beyond which the tax increases cease to have a positive effect on tax revenues in Nigeria.
A study by the Consortium pour la recherche économique et sociale (CRES) / Consortium for Economic and Social Research estimates the illicit trade in tobacco on average as 18% of the total market in the fifteen Economic Community of West African States (ECOWAS). Through simulation models, the effects on the average price, the quantities consumed, and tax revenues are estimated. Non-price factors, such as the presence of corruption, organized crime networks and widespread street-selling are powerful drivers of the development of the illicit trade in tobacco products.