The article considers problematic issues of excise policy related to the taxation of tobacco products. Changes in the excise duty rates on tobacco in Georgia over the last ten years are also ...discussed.
Tobacco products (cigarettes) are commodities that are characterized by particularly inelastic demand and price changes reduce the demand for it to a lesser extent. If different taxes, iincluding the excise duty rates on cigarettes have risen sharply above reasonable levels, making them inaccessible to a statistically significant number of consumers, a strong motivations appears instantly, and illegal supply channels are quite quickly setting up. Such a scheme of development of the situation has taken place many times around the world, even in much more economically developed countries, where the share of tobacco spending in citizens' budgets is much lower.
Comparing the codified versions of different periods of the Tax Code and other normative acts, it it has been established that from 2011 to 2021, excise rates on filtered cigarettes increased by an average 5.6 times, and on unfiltered cigarettes - 19 times. The share of taxes (excise and VAT) already exceeds 75% of the average retail selling prices for cigarettes.
The reason for the multiple increase in the tax burden on tobacco products is usually the international obligations of the country, both in terms of tobacco taxation to the World Health Organization and in the framework of the Association Agreement with the European Union. Fiscal purposes were also important in implementing the excise policy. The state needed to find additional sources of revenue for financing the increased public expenditure, and under Georgian law, excise duty is the only common State tax that can be increased without a referendum.
A sharp rise in excise rates has significantly increased the tax burden on tobacco consumption. This has led to a series of unforeseen consequences. According to official statistics, both local production and imports of tobacco products have significantly decreased. As a result, the demand for excise stamps has sharply decreased. Therefore, the fiscal effect of the multiple increase in excise duty rates on tobacco has been largely offset.
However, the reduction in the intensity of tobacco use is not confirmed by any reliable research or reasonable estimates. This indicates that we are dealing with a significant increase in excise duty-free cigarette smuggling and illicit trafficking. This fact is confirmed by statistics - there is a sharp increase in both administrative and criminal offenses in this field.
This situation and the discussion of the relevant threats is the subject of this article. We think that excise policy, especially with regard to tobacco products, is one of the most important issues in recent years, which needs to be addressed.
The aim of this research is to analyses the government challenge to simplify tobacco excise rate structure to minimize excise avoidance potentially performed by Cigarette Manufacture in Indonesia. ...Indonesia government manages to simplify the structure of tobacco excise rate from previously 12 layers into 5 layers as planned in 4 years roadmap (2018 - 2021). The aim of this initiative is to minimize excise avoidance practices, that is expected to optimize tobacco excise revenues. This policy involves various actors and gets the pros and cons of stakeholders. Basically, simplifying tobacco rate structure objective should be to discourage cigarettes consumption. This research is descriptive qualitative research, data was collected through desk study and field study through in-depth interview with key informants. The results showed that consumption control before and after the initiatives (regulated by 146 /PMK.10 /2017) did not show a positive trend. Meanwhile, there was an intervention from the tobacco industry on the process of policy formulation and the difficulty of getting agreement in the policy formulation process from related stakeholders. Finally, the initiative to further simplifying the layers has been decided to postpone in 2019.This research clearly shows that competition among stakeholders exists. The government even on the difficulty and dilemma situation to make policy decision on what priority it should undertake firstly.
The consumption of tobacco is harmful to health and has huge social costs. "Tax to control tobacco" is a widely implemented tobacco control measure all over the world. In order to examine the ...achievements of two tobacco excise tax reforms in China in 2009 and 2015 on controlling tobacco consumption, we first establish an intertemporal consumption model for addictive goods, and then validate the effectiveness of the two tobacco excise tax reforms using a Continuous Difference‐in‐Differences Model based on the panel data from 294 cities in China from 2007 to 2018. The results show that the tobacco excise tax reform in 2015 considerably reduced tobacco consumption, while the reform in 2009 did not, providing empirical evidence on the importance of "price links to tax" for tobacco control. Additionally, the study discovers that the tax reform has a heterogeneous effect on the age of smokers, the price of cigarettes, and city size.
The aim of this paper is to estimate excise tax revenue elasticity and buoyancy for tobacco products and alcoholic beverages in Greece, for the period 2000-2020. To this end, we employ core and more ...extended error correction models. Overall, our empirical results do not confirm the appropriateness of the unity assumption. Policy measures seem to affect excise tax revenues in the long run mostly through the tax-to-base relation. In most cases, excise tax revenues seem to have a larger reaction to changes in the tax base in the short run, which could be associated with different asymmetric effects, in particular the crisis/adjustment and the COVID-19 lockdown effects. Our findings indicate several differences in excise tax revenue elasticity and buoyancy between the two product categories, suggesting that individual product categories should be examined separately for a more precise estimate of tax revenue sensitivity. This implication may assist policy makers to effectively design the related tax policies, especially during abnormal periods like the COVID-19 pandemic, and derive more accurate tax revenue forecasts.
Asis book traces the growth of customs and excise, and their integral role in shaping the framework of industrial England; including state power, technical advance, and the evolution of a consumer ...society. Central to this structure was the development of two economies - one legal and one illicit. If there was a unique English pathway of industrialization, it was less a distinct entrepreneurial and techno-centric culture, than one predominantly defined within an institutional framework spearheaded by the excise and a wall of tariffs. This process reached its peak by the end of the 1770s. The structure then quickly started to crumble under the weight of the fiscal-military state, and Pitt's calculated policy of concentrating industrial policy around cotton, potteries, and iron - at the expense of other taxed industries. The breakthrough of the new political economy was the erosion of the illicit economy; the smugglers' free trade now became the state's most powerful weapon in the war against non-legal trade. If at the beginning of the period covered by this book state administration was predominantly deregulated and industry regulated, by the close the reverse was the case. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/history/9780199259212/toc.html
Based on an original data set of more than 500,000 non-alcoholic beverage price records, we evaluate the impact on consumer prices of the 'soda tax', an excise on drinks with added sugar or ...sweetener, introduced in France in January 2012. We adopt a difference in differences approach and find that the tax was gradually passed through to the prices of the taxed beverages. After 6 months of its introduction, it was fully shifted to soda prices and almost fully shifted to the prices of fruit drinks, while the pass-through for flavoured waters was incomplete. We also find that the pass-through was heterogeneous across brands and retail groups.
The illicit cigarette trade has begun to receive scholarly attention globally. Empirical studies on the illicit cigarette trade are available in the context of Indonesia. However, the Indonesian ...judicial system lacks a focus on treating illegal practices. To fill the gap, we examine Indonesian court decisions involving the illicit cigarette trade between 2010 and 2019. We provide an overview of the enforcement of Indonesia’s Excise Law 2007 relating to offences related to the illicit cigarette trade. By using a systematic quantitative literature review, we collected data on Indonesian court decisions and found the following: (1) convictions for the practice of illicit trade in cigarettes were relatively steady, with a total number from one to six court decisions annually; (2) certain offences from Indonesia Excise Law 2007 have not been found in the convictions, suggesting their underutilisation in terms of monitoring and enforcement effort; (3) the primary motivation of illicit cigarette traders as reported through the judicial system is the economic benefit or “profit” available to the enterprise; and (4) the sentencing decisions are dominated by the application of the “cumulative principle” with fines and imprisonment applied at the same time. The finding on the average length of imprisonment for illicit cigarettes, which was around 18 months, shows that this crime has low risk compared with the punishment for illicit trade in drugs and narcotics in Indonesia.
We examine how soda sales changed due to the campaign attention and election outcome of a local excise tax on sugar‐sweetened beverages. Using panel data of beverage sales from university retailers ...in Berkeley, California, we estimate that soda purchases relative to control beverages significantly dropped immediately after the election, months before the tax was implemented in the city of Berkeley or on campus. Supplemental scanner data from off‐campus retailers reveal this result is not unique to the university setting. Our findings suggest soda tax media coverage and election outcomes can have larger effects on purchasing behavior than the tax itself. (JEL D12, H20, C23, I38, Q18)
The purpose of this study is to assess the impact of excise duties on tobacco products on state s revenues. Increasing excise duties on tobacco may act as a means to reduce the consumption of this ...product and thus to have a positive effect on citizens health and prosperity. Our research showed that an increase in consumer income will result in a certain increase in cigarette consumption and an analogous decrease in fine-cut tobacco consumption, while a similar increase in cigarette price results in a small decrease in cigarette consumption and a very large increase in fine-cut tobacco consumption. Additionally, stepping up an anti-smoking campaign results in a decrease in cigarette consumption. Specifically for Greece we found that during 2019 and 2020 there will be a decrease in the states revenues from excise duties on tobacco products of €150-€200 million each year.
Innovation and regulation may reduce the harm arising from the production and consumption of excisable goods, which may warrant lower excise rates. However, countries often rely on excise revenues ...and may face conflicting interests in supporting innovation through differential excise rates and regulation on reduced harm goods and collecting sufficient tax revenues. This paper summarises recent innovations and regulations of excisable goods, discusses their potential implications for the design of excise regimes, and calls for further debate on excise taxes in the face of recent innovations and regulations.
PDF
