May 29, 2014

PMI’s Views on Tobacco Tax


Every year, on 31 May, the WHO marks World No Tobacco Day (WNTD) by focusing on one specific topic. This year the focus is on tobacco taxes. Below is a statement from PMI’s Vice President, Communications Julie Soderlund about our views on this aspect of our business:

“Tobacco taxation and pricing, when aligned with the local economic and societal conditions, can be one of the most important measures for governments to protect public health and secure public revenues. PMI supports reasonable tax measures that strike a balance between achieving these goals and ensuring that adult consumers do not turn to the black market instead of buying legal products.

Tobacco taxes around the world are already high and make-up, on-average, more than half of the price consumers pay for a pack of cigarettes today. Experience shows that while one size does not fit all, adopting a policy of gradual, regular tax increases combined with effective measures to counter illicit trade is the optimal way for governments to meet both revenue and health objectives, while reducing the risk of fostering the illegal tobacco trade. This is a delicate balance that can only be struck by government’s defining the right tax structure and levels based on its domestic economic conditions and market environment.

When this balance does not exist, the criminals behind the black market who sell without discrimination to youth, seize the opportunity to expand. Contrary to the intentions of the World Health Organization in putting taxation forward as a tool for reducing smoking rates, excessive tobacco taxes fundamentally undermine public health and rob the treasury of revenues.”


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