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Taxes as a share of cigarette price

What you should know about this indicator

Rationale

This question collects information that can be used to assess the affordability of tobacco products, as well as to calculate the share of taxes in the price of a cigarette pack.

Definition

The sum of all taxes applicable on the weighted average price of the three most sold brands of cigarettes. It is a proportion of the price and includes, when applicable, specific and ad valorem excise taxes, value added taxes, import duties, and any other taxes. WHO uses the information provided on tax policy in order to calculate the share of tobacco taxes on the most widely sold brand of cigarettes in the country. This indicator takes into account the exact contribution of all taxes in the price of a cigarette pack and therefore represents the best comparable measure of the magnitude of tobacco taxes. In Canada and the United States, in addition to federal taxes, state/provincial taxes are applied. Therefore, an average price and average state/provincial tax were calculated in order to estimate the total tax rate of a pack of cigarettes.

Method of estimation

All tax rates are recalculated to the same base, the tax inclusive retail sales price. Consider the example where Country B applies the same ad valorem tax as Country A, but ends up with higher taxation because the tax is applied later in the distribution chain. Comparing ad valorem tax rates without taking into account the stage at which the tax is applied could therefore lead to biased results. Calculation Sts is the share of taxes on the price of a widely consumed brand of cigarettes(20-cigarette pack or equivalent). Sts = Sas + Sav + Sid + SVAT Where: Sts = Total share of taxes on the price of a pack of cigarettes; Sas = Share of amount-specific excise taxes (or equivalent) on the price of a pack of cigarettes; Sav = Share of ad valorem excise taxes (or equivalent) on the price of a pack of cigarettes; Sid = Share of import duties on the price of a pack of cigarettes (if the most popular brand is imported); SVAT = Share of the value added tax on the price of a pack of cigarettes. Sas is calculated by dividing the amount for a 20-cigarette pack by the total price. Unlike Sas, Sav (the share of ad valorem taxes) is much more difficult to calculate and involves making some assumptions (see Technical Note III of the WHO Report on the Global Tobacco Epidemic, 2009). Sid is sometimes amount-specific, sometimes value-based. It is therefore calculated the same way as Sas if it is amount-specific and the same way as Sav if it is value-based. SVAT is usually applied at the end of the taxation process, either on the VAT-exclusive or inclusive retail sales price.

Taxes as a share of cigarette price
The sum of all taxes applicable on the weighted average price of the three most sold brands of cigarettes. It is a proportion of the price and includes, when applicable, specific and ad valorem excise taxes, value added taxes, import duties, and any other taxes. WHO uses the information provided on tax policy in order to calculate the share of tobacco taxes on the most widely sold brand of cigarettes in the country. This indicator takes into account the exact contribution of all taxes in the price of a cigarette pack and therefore represents the best comparable measure of the magnitude of tobacco taxes. In Canada and the United States, in addition to federal taxes, state/provincial taxes are applied. Therefore, an average price and average state/provincial tax were calculated in order to estimate the total tax rate of a pack of cigarettes.
Source
World Health Organization - Global Health Observatory (2024) – processed by Our World in Data
Last updated
January 3, 2024
Next expected update
January 2025
Date range
2012–2014
Unit
%

Sources and processing

This data is based on the following sources

The GHO data repository is WHO's gateway to health-related statistics for its 194 Member States. It provides access to over 1000 indicators on priority health topics including mortality and burden of diseases, the Millennium Development Goals (child nutrition, child health, maternal and reproductive health, immunization, HIV/AIDS, tuberculosis, malaria, neglected diseases, water and sanitation), non communicable diseases and risk factors, epidemic-prone diseases, health systems, environmental health, violence and injuries, equity among others.

Retrieved on
January 3, 2024
Retrieved from
https://www.who.int/data/gho
Citation
This is the citation of the original data obtained from the source, prior to any processing or adaptation by Our World in Data. To cite data downloaded from this page, please use the suggested citation given in Reuse This Work below.
World Health Organization. 2024. Global Health Observatory data repository. http://www.who.int/gho/en/. Accessed on 2024-01-03

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“Data Page: Taxes as a share of cigarette price”. Our World in Data (2024). Data adapted from World Health Organization. Retrieved from https://ourworldindata.org/grapher/taxes-as-share-of-cigarette-price [online resource]
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World Health Organization - Global Health Observatory (2024) – processed by Our World in Data

Full citation

World Health Organization - Global Health Observatory (2024) – processed by Our World in Data. “Taxes as a share of cigarette price” [dataset]. World Health Organization, “Global Health Observatory” [original data]. Retrieved November 21, 2024 from https://ourworldindata.org/grapher/taxes-as-share-of-cigarette-price