The first tobacco tax was levied in Europe by order of the English King James I.
The tobacco tax has two faces. From the point of view of financial policy, it should bring in as much tax money as possible to cover the state budget , while health policy sees it as a steering tax that should bring about a reduction in consumption. There is therefore a conflict of interest between these two political objectives with regard to desired tobacco consumption. In recent years, the tobacco tax has been increased significantly in various countries. Worldwide, around 137 billion euros are collected annually through the tobacco tax.
Whether the collection of a tobacco tax has a positive impact on the national budget also depends on the costs caused by smoking. For example, if the state is also involved in the health care system, the medical expenses for diagnosing and treating smokers' illnesses must also be taken into account for a correct economic assessment of tobacco tax. Incapacity to work caused by smoking also leads to tax losses. On the other hand, such comparative calculations are controversial because the additional costs in the healthcare system and the loss of income are usually only compared with the tobacco tax, but not the relief of the pension funds due to the seven to eight year shortened life expectancy of smokers. It is also important to take into account the cost of combating cigarette smuggling ; an increase in tobacco tax usually increases the percentage of tobacco products smuggled.
A 2017 study concluded that higher cigarette prices reduced infant mortality. Developments in 23 EU countries between 2004 and 2014, in which tobacco tax were raised, were examined. One euro higher package price led to a decrease in infant deaths of 0.23 per 1000 life births in the first year of the price increase.
- WHO - mpower Report 2008 (PDF; 8.0 MB)
- Cigarette Price Differences and Infant Mortality in the European Union - For The Media - JAMA Network. Retrieved September 30, 2017 (American English).