Publication: Reducing Tobacco Use Through Taxation in the Russian Federation: A Modelled Assessment of Two Policy Options
Loading...
Published
2018-10-01
ISSN
Date
2018-10-24
Author(s)
Editor(s)
Abstract
This report presents results of the modelling exercise in terms of excise tax increases for the period 2018–2021, including average excise tax and revenue mobilization options; it also compares the tobacco excise tax already included in the country's current tax code with that necessary to achieve proposed EU minimum rates by 2021 (Minimum EU excise tax rates scenario).
Link to Data Set
Citation
“World Bank Group. 2018. Reducing Tobacco Use Through Taxation in the Russian Federation: A Modelled Assessment of Two Policy Options. Global Tobacco Control Program;. © World Bank. http://hdl.handle.net/10986/30612 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Reducing Tobacco Use through Taxation(World Bank, Washington, DC, 2018-06-01)As a country with one of the highest male smoking rates and one of the lowest cigarette prices in the world, Korea has prioritized many tobacco control efforts, including bans on smoking in public places, regulations on tobacco advertising, and public education about the harms of tobacco use. Consistent implementation of tobacco control policies has helped to magnify the importance of using tobacco tax rises as the basis of tobacco price policy – though these reforms took a long time to implement.Publication The Effects of Tobacco Taxes on Health : An Analysis of the Effects by Income Quintile and Gender in Kazakhstan, the Russian Federation, and Ukraine(World Bank, Washington, DC, 2014-10)The main objectives of this paper are to estimate the burden of tobacco-caused mortality as a whole and by main tobacco-related diseases in Kazakhstan, the Russian Federation, and Ukraine, and to assess the distributional health impact of an increase in tobacco taxation in these three countries. According to the results obtained, in 2012 smoking caused around 310,000 deaths in Russia, about 70,000 in Ukraine, and 14,300 in Kazakhstan, representing a key factor of mortality among the working-age population. Using data from various sources, the paper estimates the distributional consequences of a hypothetical tax rise in the three countries that leads to an approximately 30 percent increase of the average retail price of cigarettes. The analysis includes an estimation of changes in smoking prevalence, mortality, life expectancy, and public health expenditures by income quintile and gender. Considered excise growth can lead to about 3.5 to 4.0 percent fall in smoking prevalence, which in turn can avert about 600,000 tobacco-related deaths in Russia, 140,000 in Ukraine, and 30,000 in Kazakhstan over a 50 years period. Reduced tobacco-related morbidity will also result in substantial decrease in health expenditures for the treatment of tobacco-related diseases. Positive health effects are expected to be pro-poor, as almost 60 percent of the reduction in mortality is concentrated in the two lower-income quintiles of the population of the three countries.Publication Tobacco Taxation and Impact of Policy Reforms(World Bank, Washington, DC, 2018-02)Evidence from across the world shows that raising taxes sharply on tobacco products, and then adjusting for inflation and increased affordability due to growing incomes, is the single most cost-effective measure to reduce tobacco consumption. A scaled-up and stronger tobacco control effort is required in Trinidad and Tobago to achieve the WHO-recommended target of at least 30 percent reduction in smoking prevalence by 2030, which would avoid ill health, premature mortality, and disability among current and future smokers by the end of the 21st century. The benefits of tobacco taxation go beyond public health. As documented in a recent report by researchers at the International Monetary Fund in many countries, raising tobacco taxes can offer a "win–win": higher revenue and positive health outcomes. While countries' circumstances and governments weighting of revenue, health, and other objectives vary, and hence the desirable level of tobacco tax rates, in many cases, current tax rates are far below what is feasible in terms of revenue potential. In the case of Trinidad and Tobago, increasing tobacco taxes as assessed in this report, could serve revenue purposes as well as health and other objectives. And if the government decides to put more weight on health objectives, it could raise taxes even further.Publication Modeling the Long-Term Health and Cost Impacts of Reducing Smoking Prevalence through Tobacco Taxation in Ukraine(World Bank, Washington, DC, 2017-03-12)Smoking is a leading cause of preventable premature deaths. Smoking’s effects will continue to devastate lives in many countries, including Ukraine, if measures are not implemented to reduce its prevalence. Smoking is a major cause of many chronic diseases, such as cardiovascular disease, respiratory disease, and smoking-related cancers. Over recent years, successful tobacco control policies in Ukraine have resulted in one of the fastest declines in smoking prevalence in the world (1) This is largely due to multifaceted tobacco control legislation, adopted from 2005 and subsequently upgraded. Ukraine ratified the WHO Framework Convention on Tobacco Control (FCTC) in 2006. Currently, Ukrainian legislation basically corresponds to FCTC requirements. In 2005, Ukraine adopted a first tobacco-control law. Since then, several additional tobacco-control policies have been implemented in the country. Smoke-free policies supported by media campaigns have covered many workplaces and public places since the middle of 2006. Under these policies, at least 50 percent of the area of restaurants and bars had to be isolated from the smoking area, so that tobacco smoke did not penetrate into smoke-free areas. This measure was supported by an intensive media campaign and public movement in favor of smoke-free policies. Many restaurants went completely smoke-free both before and after implementing this measure. As of December 2012, restaurants, workplaces, and other public places became 100 percent smoke-free. Designated smoking places, which figured in the legislation between 2006 and 2012, were abolished in the amended laws. As of late 2006, cigarette packs carried textual warning labels covering 30 percent of their surface, in place of a previous warning which covered 10 percent of the front surface and stated: ‘Ministry of Health warns: smoking is bad for your health.’ Since October 4, 2012, large (50 percent of the pack surface area), graphic health-warning labels on tobacco packaging have been introduced. The present report provides evidence from a modeling exercise undertaken to predict the health and related cost impacts that may stem from the implementation of a tobacco excise tax increase in Ukraine. Impacts are calculated relative to the status quo before the tax hike, and are modeled, beginning in 2017, for 2025 and 2035.Publication Economics of Tobacco Toolkit, Tool 4 : Design and Administer Tobacco Taxes(World Bank, Washington, DC, 2013)The purpose of this tool is to help the reader understand the structure, design, and administration of tobacco taxes. There is no doubt about the adverse health impacts of tobacco use. In both developed and developing countries, the Ministries of health, tobacco interest groups, academia, and advocates against tobacco strongly believe that tobacco consumption should be reduced, and that tobacco taxes are the single most cost-effective policy tool to achieve this goal. This tool discusses some of the issues surrounding tobacco taxes from the perspectives of consumers, public health advocates, politicians, and government administrators. Guidance is provided in how to satisfy the goals of these players without compromising their interests. This tool is intended primarily for public health advocates, policy makers, tax administration staff, and government officials. Public health advocates will gain information on the various types of tobacco taxes and which type can best reduce cigarette consumption. The tool also discusses whether and how increased tobacco taxes create a financial burden on consumers, especially the poor. Since tobacco taxes are often justified from the public health perspective, this tool includes another point of view-that of the policy maker and the tax administrator. Designing and administering tobacco taxes is a process unique to every government. There are too many variables-from tobacco and tobacco product usage to the objective and purpose of taxation to the viable and most effective method of imposing and administering a tax-to allow for a general rule of thumb regarding tobacco excise taxes. Therefore, this tool cannot present universally applicable methods to apply, mathematical models or formulas to fulfill, or step-by-step instructions to follow. An excise tax is a tax on selected goods produced for sale within a country, or imported and sold in that country. The tax is usually collected from the producer/manufacturer/wholesaler or at the point of final sale to the consumer. An excise tax can be imposed on products and services if they have one or more of the characteristics. There are two general types of sales taxes: single-stage and multistage. Single stage sales taxes apply only at one stage of the production/distribution chain. Multi-stage sales taxes apply at several stages of the production/distribution chain for a product or service. The value-added tax (VAT) is a general indirect tax on consumption.
Users also downloaded
Showing related downloaded files
Publication Reforming Regional-Local Finance in Russia(Washington, DC: World Bank, 2006)The book assesses the current state of Russia's regional and local fiscal relations, and self-government, and analyzes the related reforms undertaken over the past decade. The analysis is based on the kind of first-hand experience and in-depth knowledge of Russian intergovernmental reforms that only a handful of Western scholars possess. This book complements the earlier World Bank Institute (WBI) title Russia's Transition to a New Federalism (2001), reflecting the shift in Russia's policy reform agenda, from an emphasis on federal and regional relations, to the regional and local levels. The study uses a framework that integrates all the building blocks of federalism: size and structure of jurisdictions, expenditures, revenues, transfers, and borrowing. It offers reform options based on international practices and normative principles, while also identifying some dangers that may arise in implementing the next round of proposed intergovernmental reforms in Russia. The book was prepared as part of the WBI's program to train central and local government officials to carry out intergovernmental reforms, and to build a core group of local trainers who can deliver future programs independently. The current approach of the federal government toward regional-local relations presents a mix of rigid norms and loose guidelines. The Constitution gives the federal and regional government joint responsibility for the implementation of the citizens' right to local self-government. This has enabled the federal government to pass a number of constitutional laws that develop the framework for local governance. Regional governments were supposed to establish the system of local self-government on their territory in accordance with federal legislation, by passing regional legislation that would further elaborate the regional-local government arrangements. However, in areas where regional governments had some degree of policy freedom, often many did not have the required technical expertise to make their own informed policy choices. The easiest solution for defining regional-local relations seems to have been to copy the federal approach to federal-regional relations, and apply it at the regional-local level.Publication Intergovernmental Reforms in the Russian Federation : One Step Forward, Two Steps Back?(Washington, DC: World Bank, 2009)Intergovernmental reforms in the Russian Federation: one step forward, two steps back? Is a critical analysis of Russia's intergovernmental reform program which began in the early 1990s. It assesses the effects of a broad range of reforms adopted over two tumultuous decades during which the Russian Federation experienced significant, and at times drastic, political regime changes, coupled with a similarly turbulent economic growth trajectory. This environment reshaped intergovernmental relations, requiring certain fiscal responsibilities to be delegated to the sub-national levels. These reforms, however, were not always accompanied by the kinds of administrative and political structures required to support a truly devolved system of intergovernmental fiscal relations. As this study indicates, in recent years there has been a tendency to recentralize some powers that had been granted to sub-national governments under earlier reforms, a trend that may call into question the future of fiscal decentralization in the federation. Moreover, the current global economic downturn has had a significant effect on Russia' economic growth, largely because of the country's overdependence on oil, gas, and mineral exports. It is likely that in the present economic climate the political regime will be inclined to further limit sub-national autonomy.Publication Tobacco Taxation Incidence(World Bank, Washington, DC, 2018-10)Despite the well-known positive effects of tobacco taxes on health outcomes, policy makers avoid relying on such taxes because of their possible regressive impact. Using an extended cost-benefit analysis to estimate the distributional effect of cigarettes in the Russian Federation, this paper finds that the long-run impact may in fact be progressive. The methodology applied incorporates the negative price effect caused by an increase in tobacco taxes, combined with a presumed future reduction in medical expenditures and a rise in working years caused by a reduction in the rate of smoking among the population. The analysis includes estimates of the distributional impacts of price rises on cigarettes under various scenarios, based on information taken from the Russia Longitudinal Monitoring Survey -- Higher School of Economics for 2010–16. One contribution is the quantification of impacts by allowing price elasticities to vary across consumption deciles. Overall, cigarette taxes exert a positive long-term effect on household incomes, although the magnitude depends on the structure of the conditional price elasticity. If the population is more responsive to tobacco price changes, then it would experience greater gains from the health and extended work-life benefits.Publication Russia(Washington, DC, 2016-12-15)The aim of this note is to present and analyze subnational fiscal trends in Russia in the context of overall slowing economic growth and falling oil prices over the last few years. In particular, in 2015, GDP fell by 3.7 percent. Despite efforts to cut expenditures, the federal deficit increased to 2.4 percent of GDP. Subnational governments were also affected by the economic slowdown. Aggregate subnational revenues declined, in real terms, by 6 percent between 2014 and 2015. Revenues from taxes (including shares of federal taxes) fell by 4 percent while federal transfers fell by 13 percent. Nevertheless, the aggregate fiscal performance of subnational governments actually improved over this period. The nadir of subnational government finances occurred in 2013, when the consolidated subnational deficit reached 0.9 percent of GDP. Since then, it has shrunk. In 2015, the deficit was equal to only 0.2 percent of GDP. This was largely achieved by drastic cuts in spending. Spending in the social and infrastructure sectors both fell by 9 percent in real terms between 2014 and 2015. This note examines the fiscal prospects of subnational governments in Russia, focusing particularly on the nature of these spending cuts and whether they are sustainable over the medium term.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.