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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Indonesia’s finance minister defended a plan to raise cigarette prices by more than a third to reduce smoking rates, after some in the tobacco industry said it would encourage illegal manufacturing and threaten jobs.
Tobacco taxation in Bangladesh follows ad valorem method, in which the amount of tax is proportional to the price per unit of tobacco. Because the prices of tobacco products in Bangladesh are generally low, the impact of tobacco tax on the retail prices has not been very high. Consequently, tobacco consumption has actually become more affordable despite increase in the retail price as income growth during the period outpaced the growth in tobacco price. Over the last decade, the price of high and medium-tier cigarettes went up and their market share drastically went down. But as the price of low-tier cigarettes remained low, so the lost market share of high and medium-tier cigarettes was completely replaced by lower-tier ones.
The argument that tobacco taxes will fuel a black market remains one of the tobacco industry’s most powerful tactics to dissuade governments from increasing “sin taxes”. Anti-tobacco advocates point out that companies “exaggerate” how tobacco taxes affect smuggling to “scare policymakers from taking science-based steps to reduce tobacco use”. In order to set that story straight, one needs to have data from reputable organizations.
Health experts agree that raising taxes is the most effective way to reduce tobacco use. But many states — Missouri, Kentucky and Georgia among them — have not significantly increased their cigarette fees in decades, bowing to pressure from tobacco lobbyists and an ingrained antipathy among conservatives to raising taxes of any kind. As a result, America’s smokers are increasingly concentrated in states where cigarettes are cheap. The huge gap in tobacco prices is the result of a long-running war between tobacco companies and health advocates.