Impact of cigarette taxation policy on excise revenues and cigarette consumption in Uzbekistan
Ключові слова:
Uzbekistan, tobacco, excise, cigarettes, revenueАнотація
BACKGROUND: In 2012,Uzbekistanratified the Framework Convention on Tobacco Control, which states that price and tax measures are an effective means of reducing tobacco consumption. We aimed to explore the effect of taxation policies on revenues and cigarette consumption.
METHODS: Data on tax rates, revenues, cigarette sales were taken from national reports. To forecast potential revenues, a scenario analysis was performed.
RESULTS: In 1991-2004, ad valorem excise system was in place in Uzbekistan, which was later replaced by the specific excise system. In 1997-2011, the nominal average excise has increased by a factor of twenty, but in real terms, after a sharp increase in 1999, average excise declined annually and increased only in 2010-2011. Annual cigarette sales per capita of adult population in 1999-2007 constituted 17-25 cigarette packs, while in 2008-2011 it increased to 30-37 packs. Four scenarios of excise tax increases in 2012 were developed: one actual scenario based on the rates effective in Uzbekistan in 2012, and three hypothetical ones anticipating excise rates increase by 1.5, 2 and 3-fold. With actual excise increase in 2012, the inflation-adjusted budget revenues would grow by 5%, and with three hypothetical - by 17%, 35% and 66% respectively, despite the decline of tax-paid cigarette sales.
CONCLUSION: Stabilization or reduction in cigarette excises in Uzbekistan in 2002-2008 led to a decline in real excise revenues and the growth of cigarette sales. In 1999 and 2010-2011, excises were significantly increased and the real revenues have risen, despite the decline in cigarette sales. As cigarette prices are low, the illegal outflow of cigarettes from Uzbekistan apparently exceeds the illegal inflow. A significant increase in cigarette excise (1.5-3 fold) can both increase budget revenues and reduce cigarette consumption, with greater increase yielding more benefits.
KEYWORDS: Uzbekistan; tobacco; excise; cigarettes; revenue.
Посилання
Council of the European Union. (2011). COUNCIL DIRECTIVE 2011/64/EU of 21 June 2011 on the structure and rates of excise duty applied to manufactured tobacco. Retrieved 16 Jan 2013, from http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:176:0024:0036:EN:PDF
Eriksen, M., Mackay, J., & Ross, H. (2012). The Tobacco Atlas (4th ed.): American Cancer Society.
Gallus, S., Tramacere, I., Boffetta, P., Fernandez, E., Rossi, S., Zuccaro, P., . . . La Vecchia, C. (2011). Temporal changes of under-reporting of cigarette consumption in population-based studies. Tob Control, 20(1), 34-39. doi: tc.2009.034132 [pii]
1136/tc.2009.034132 [doi]
Gilmore, A., Collin, J., & Townsend, J. (2007). Transnational tobacco company influence on tax policy during privatization of a state monopoly: British American Tobacco and Uzbekistan. Am J Public Health, 97(11), 2001-2009. doi: AJPH.2005.078378 [pii]
2105/AJPH.2005.078378 [doi]
Gilmore, A., McKee, M., & Collin, J. (2007). The invisible hand: how British American Tobacco precluded competition in Uzbekistan. Tob Control, 16(4), 239-247. doi: 16/4/239 [pii]
1136/tc.2006.017129 [doi]
IARC. (2011). Effectiveness of Tax and Price Policies for Tobacco Control IARC Handbooks of Cancer Prevention in Tobacco Control (Vol. 14). Lyon, France: International Agency for Research on Cancer.
Jha, P., & Chaloupka, F. J. (1999). Curbing the epidemic: governments and the economics of tobacco control: World Bank Publications.
Krasovsky, K. (2010). "The lobbying strategy is to keep excise as low as possible" - tobacco industry excise taxation policy in Ukraine. Tob Induc Dis, 8, 10. doi: 1617-9625-8-10 [pii]
1186/1617-9625-8-10 [doi]
Krasovsky, K. (2012). Dynamics of smoking prevalence and tobacco products market in Belarus. Tobacco Control and Public Health in Eastern Europe, 2(1), 9-16. doi: 10.6084/m9.figshare.92915
Ministry of Health of the Republic of Uzbekistan. (2004). Uzbekistan Health Examination Survey 2002.
REGNUM Information Agency. (2011). An attempt to smuggle tobacco products into Turkmenistan was stopped. Retrieved 16 February 2013, from http://www.regnum.ru/news/1474156.html#ixzz2I1rRyHNM
State Customs Committee of the Republic of Uzbekistan. (2010). “Foreign” tobacco. Retrieved 16 February 2013, from http://old.customs.uz/rus/news/zabugorniy_tabak.mgr
Usmanova, G., Mamatova, N., Shukurov, S., Yurekli, A., & Makhamova, N. (2007). Economic and health costs of smoking in Uzbekistan (based on the results of household inpatient, and outpatient surveys). Tashkent.
Usmanova, G., Neumark, Y., Baras, M., & McKee, M. (2012). Patterns of adult tobacco use in Uzbekistan. Eur J Public Health, 22(5), 704-707. doi: ckr125 [pii]
1093/eurpub/ckr125 [doi]
World Health Organization. (2005). WHO Framework convention on tobacco control. Geneva: WHO.
World Health Organization. (2010). WHO technical manual on tobacco tax administration. (pp. 129). Geneva.
World Health Organization. (2011a). Global status report on noncommunicable diseases 2010. Geneva.
World Health Organization. (2011b) WHO report on the global tobacco epidemic, 2011: Warning about the dangers of tobacco. Geneva.
World Health Organization. (2012) WHO global report: mortality attributable to tobacco. Geneva: World Health Organization.
