Tobacco kills: stronger excise taxes would save lives

Abstract

Guillermo Paraje and colleagues argue that excise taxes are the most effective yet least implemented measure for tobacco control and that overcoming tobacco industry opposition could prevent millions of premature deaths

The World Health Organization’s Framework Convention on Tobacco Control (FCTC) was enacted in 2005 with the objective of accelerating evidence based interventions to reduce global smoking. Currently, 183 countries with 90% of the world’s population have ratified the convention.¹ WHO subsequently issued guidance, informed by work from the World Bank and the Curbing the Epidemic report,² to help countries with tobacco control policy. This outlines six cost effective strategies countries should implement to reduce tobacco consumption using the acronym MPOWER: monitoring tobacco use; protecting people from tobacco smoke, primarily through smoke-free policies; offering cessation therapies to quit tobacco; warning about the use of tobacco; enforcing tobacco advertising, promotion, and sponsorship bans; and raising tobacco taxes.

Smoking still causes over seven million deaths annually,¹ and the effectiveness of the FCTC and individual MPOWER measures in reducing smoking has been questioned, particularly by conservative and libertarian media outlets and think tanks.^{3 4} However, extensive quantitative research shows a strong association between FCTC ratification and improvements in smoking related outcomes, including reductions in smoking prevalence among adults and youth, declines in the number of smokers, and increased cessation rates.^{5 6 7 8 9} Improvements in these outcomes are closely linked to the extent and vigour with which measures are implemented, especially the design and substantial increases of tobacco taxes.⁵ Despite this evidence, taxation remains substantially underused as a tool in tobacco control.

Role of FCTC in reducing smoking

Most quantitative assessments of the effect of FCTC ratification or MPOWER show both to be effective.^{5 6 7 10} An interrupted time series analysis of current smokers across 171 countries that ratified the FCTC documented a significant reduction in the number and prevalence of current smokers under the age of 25, by 15.5% and 7.5% respectively, a decade after each country’s ratification, compared with the underlying trends before ratification.⁵ The quit ratio (the ratio between those smokers who ceased smoking and the population that ever smoked) for adults aged 45-59 increased by 1.8% a decade after FCTC ratification. Countries that raised taxes substantially (by 10 percentage points or more) along with FCTC ratification had the biggest effects on both prevalence and cessation.⁵ A regression analysis of 126 countries found that tobacco prevalence declined in countries that implemented more MPOWER measures between 2007 and 2014, with a dose-response for greater decreases with more measures adopted.⁶

However, another interrupted time series analysis of 70 countries casts doubts on the FCTC’s effectiveness, finding that it did not accelerate the declining trend in per capita cigarette consumption.¹¹ We re-analysed the same data using relative changes in per capita cigarette consumption instead of absolute changes (which is reasonable, as achieving a reduction in consumption of one cigarette is easier at high quantities than at lower ones). Our re-analysis showed a strong acceleration in such a relative decrease after FCTC enactment.¹² Similarly, when the year of FCTC ratification for each country is treated as the intervention point (as in previous analyses⁵) or when focusing on countries that significantly increased tobacco taxes after ratification, the acceleration in the relative decline of per capita cigarette consumption becomes even more pronounced.¹² Overall, re-analyses show that FCTC ratification was associated with substantial decreases in cigarette consumption.^{5 6 7}

Nonetheless, uptake of the MPOWER polices has been uneven, and the benefits of its full implementation have yet to be realised. Using data collected regularly by WHO and available since 2008,¹³ we have created a simple tobacco control implementation index (TCI). We adjusted the original MPOWER scales, which go from 1 (no information) to 5 (maximum achievement), to give a scale of 1 (minimum implementation or no information) to 4 (maximum implementation) and estimated the geometric mean for countries that have ratified the FCTC.

Across all 165 countries for which complete data exist, the average score was 2.1 (out of a maximum of 4) in the year of ratification (or the first year with data available if ratification occurred before 2008) and rose to 2.7 a decade later. Moreover, 88% of the ratifying countries (146 countries, representing about 950 million smokers) increased their TCI within a decade. However, these averages mask an uneven progress in each MPOWER dimension. For instance, the dimensions related to pack warnings (W) and implementation of smoke-free policies (P) saw large improvements (fig 1), whereas raising tobacco taxes (R) increased by less than 9% over this period.^{2 8 9} Indeed, only 68% of those countries were able to increase tobacco taxes.¹⁴ The total tax share on the final price of the most sold brand of cigarette in each country rose only from 48% to 55% between 2008 and 2022 for 160 FCTC ratifying countries with available data, well below the WHO and World Bank recommended minimum of 75%.

Fig 1.

Global mean of coverage of MPOWER measures in year of country ratification or 2008 (whichever comes later) and 10 years after ratification¹³

Other studies that consider not only the tax share but also the tax structure and the effects of taxes on affordability have identified only marginal improvements. The “tobacco tax scorecard,” measuring average changes on those dimensions, increased from 1.9 in 2014 to 2.0 in 2022 (on a scale from 0 to 5, where 0 represents the lowest implementation of tobacco taxes).¹⁵ Total taxes on the most sold brand’s final price increased only modestly over the same period.

This is concerning given that tobacco taxes are the single most cost effective tobacco control intervention, particularly to reduce consumption among young people and those with low incomes.^{2 8 9} Large increases in excise taxation, structured to minimise incentives to switch to cheaper brands (eg, specific taxes based on quantity and not on price), are the most effective in promoting smoking cessation and preventing onset.^{8 16} The speed at which the prevalence of current youth smokers (25 years old or less) fell after FCTC ratification was three times faster among countries that increased tobacco taxes by 10 or more percentage points after ratification than in those that did not raise taxes or did so by less than 10 percentage points.⁵

Why tobacco excise taxes are still underused globally

Tobacco taxes have been the prime target of conservative and libertarian outlets with strong ties to the tobacco industry (an industry with annual profits now likely exceeding $80bn).^{17 18 19} Arguments against taxes are usually that “taxes are ineffective as smokers are insensitive to price increases,”²⁰ “tobacco taxes increase illicit trade,”²¹ “tobacco taxes hurt disproportionally the poor,”²¹ “tobacco taxes hurt personal freedom and choice and promote nanny state policies,”⁴ etc. Others argue that higher taxes will reduce revenue and affect employment. These arguments are so recurrent and predictable that they have been given the acronym of SCARE (smuggling and illicit trade, court and legal challenges, anti-poor rhetoric, revenue reduction, and employment impact).¹⁶

The evidence against SCARE tactics is overwhelming. There is no doubt that tobacco taxes affect prices and reduce consumption,^{2 8 9 22} or that illicit trade is unrelated to tobacco taxation.^{8 22} Concerns about the regressivity of taxation (ie, that it affects poorer people proportionally more than richer ones) are largely unfounded. Analyses that consider both the financial costs of taxation and the economic and health benefits of not consuming tobacco find that tobacco taxes are progressive.²² The argument in favour of personal choice becomes absurd when talking about a highly addictive substance such as nicotine and when nicotine addiction often starts in uninformed youth, restricting the freedom of the same person in the future.²³ Finally, saying that taxes affect employment contradicts the argument that taxes are ineffective in changing consumers’ behaviour. Several studies show not only that tobacco taxes do not affect aggregate employment but that they may increase it, as resources not spent on tobacco are spent on more labour intensive products and fiscal revenue is typically spent on public services (which are also labour intensive).²²

How the tobacco industry hijacks public health

The interference of the tobacco industry in public policy decisions, including taxes, is widespread and appears to be increasing. The 2023 global tobacco interference index revealed that, while 29 countries made progress in reducing tobacco industry interference, 43 countries registered a deterioration between 2021 and 2023.²⁴ Despite article 5.3 of the FCTC explicitly acknowledging the harmful effects of such interference and urging countries to act against it, the tobacco industry’s influence remains substantial, especially in countries with institutional weaknesses.

Industry influence is associated with a lower implementation of control measures.²⁵ Apart from communication strategies, the tactics used to block, modify, or delay tobacco control policies include direct lobbying and campaign contributions, the direct funding of researchers (the Global Action to End Smoking, directly funded by Philip Morris International,³¹ is one example), the use of seemingly independent front groups (such as commerce and trade chambers and “illicit trade observatories”), and corporate social responsibility programmes.^{18 26} It also includes intimidation and litigation. For example, Philip Morris International sued Uruguay in 2010 and Australia in 2011 over its cigarette packaging regulations.^{32 33} The tobacco industry has also been reported to have infiltrated national delegations in the governing body of the FCTC.²⁷

Sharper focus for the FCTC

Some argue that the FCTC needs updating because it does not deal effectively with the emergence of new tobacco and nicotine products.²⁸ However, conventional cigarettes are still the most widely consumed product; the tobacco industry estimates that 10 times more people smoke cigarettes than use e-cigarettes.²⁹ Conventional tobacco products are still the primary public health concern, especially in low and middle income countries. More attention therefore needs to be given to implementation of existing effective measures, especially taxation.

Nothing prevents FCTC signatories, at the next meeting of its parties, from efficiently reforming the convention and sharpening the policy recommendations. Any such reform will need to be paired with updated guidance for countries on isolating the tobacco industry, particularly in its efforts to thwart large tax increases.

Without a substantial acceleration in cessation among current smokers, the world can expect at least 125 000 deaths a week from smoking for the next several decades.³⁰ Countries and global non-governmental organisations must prioritise interventions based on clear evidence. Large increases in tobacco excises would substantially raise cessation rates, which in turn would help avoid millions of premature deaths in the next few decades.³⁰

Key messages.

• The Framework Convention on Tobacco Control (FCTC) has accelerated the decline in per capita cigarette consumption and raised smoking cessation

• Higher tobacco taxes are the most cost effective but most underused policy within the FCTC to reduce tobacco use

• Countries that ratified the FCTC and significantly increased tobacco taxes saw greatest declines in smoking rates

• To reduce deaths and disease from smoking, countries and global partners must focus on increasing excise tobacco taxes and more aggressive countering of tobacco industry influence on tax policy