This section provides everything you need to effectively communicate how the industry views tobacco taxes as a direct threat to their profitability and actively works against its adoption worldwide.
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The total tax revenue from the tobacco industry amounts to only about 20% of the total cost of smoking in Pakistan.
Country-Level Industry Data: Includes examples of the industry’s shady tactics and greed from countries around the world.
$700 million will be lost in tax revenue by 2030 from tax evasion by just one company, British American Tobacco, if business continues as usual for the company.
Tobacco taxes, by reducing consumption, have the potential to impact the tobacco industry’s profitability, therefore the multinational tobacco companies oppose tobacco taxes increases.
Momentum for ambitious tobacco tax reform can be enhanced, and cross-border threats like cigarette smuggling minimized, when countries work together in a regional structure.
As regulation tightened in the high income countries, tobacco companies’ shifted their focus. Now, around 80 percent of the 1.1 billion smokers worldwide live in low and middle income countries.
Many studies show that widespread use of tobacco obstructs countries’ economic development, due to the increased healthcare costs and reduced productivity.
Tobacco farming and manufacturing account for a small and declining share of economic activities in most countries.
Employment in tobacco farming is low compared to other farming activities, and tobacco manufacturing generates very few jobs.
Tobacco manufacturing generates very few jobs, and those jobs are declining due to the tobacco industry’s automation and mechanization of the manufacturing process.
As of 2016, 41 countries reported earmarking tobacco tax revenues for a health or prevention purpose. Among them, 9 were high-income countries, 29 were middle-income, and 3 were low-income.
In 2015, the Tobacco Industry made more than $62.27 billion USD in profit, which is about a $9,730 profit per each person who died from smoking tobacco that year.
Tobacco use costs the world over $1.4 trillion USD each year in health care costs and lost productivity, equivalent in magnitude to1.8% of global GDP.
The most effective tobacco taxes are simple to implement and monitor. They are uniform across products, without a tiered system, based on product characteristics or price bands. All categories of tobacco products are subject to the same tax laws and same tax rates.
The most effective tobacco taxes are simple to implement and monitor. They reduce tax avoidance and evasion, enhance revenue, and have a significant impact on tobacco use by reducing the incentive to substitute among tobacco products.
The tobacco industry exploits the complexity of the tax system and agrees to a tax rate increase while simultaneously changing other features of the tax law to neutralize or lower the impact of the tax increase. The tobacco industry wants to keep its tax payments as low as possible. By changing certain features of the tax law, the industry guarantees that an approved tax increase has a minimum impact on its tax liability.
Cigarette companies reduce the number of cigarettes per pack after a tax increase in order to maintain a price per pack similar to the price before the tax increase. The impact of a tax increase on tobacco use will be less than expected while the tax revenue will exceed the expectation. The industry may sell fewer cigarettes per smoker, but it minimizes the impact of the tax increase on smoking rates.
The tobacco industry’s efforts to control policy and legislation rely on a wide range of techniques, including “testimony, position papers, constituency letters and contacts, and… face-to-face discussion between industry representatives and legislators” to achieve its objective “to block, nullify, modify or delay pending legislation.”
Historically, the tobacco industry has benefited from cigarette smuggling and has even participated in it directly. Manufacturers deliberately looked the other way when the tobacco is smuggled, or even flood the markets themselves with illicit sticks.
Tobacco control does not impact overall employment significantly. Consumers who reduce spending on tobacco products will buy other goods and services, shifting jobs from one sector to another.
74.8% of adults in Pakistan support increasing taxes on tobacco products.
It has been estimated that, if global illicit trade were eliminated, governments would immediately gain at least $31 billion USD in revenue, and beginning in 2030, more than 160,000 lives would be saved per year.