Health, Financial and Distributional Consequences of Tobacco Excise Tax in Lebanon

2016

Taxation is one of the most effective tobacco control measures, yet evidence on the distributional impact of tobacco taxation in low- and middle-income countries remains scant. This paper considers the financial and health effects, by socio-economic class, of increasing tobacco taxes in Lebanon, a middle-income country, and finds increasing tobacco taxes would lead to large financial and health benefits, and would be pro-poor in health gains, savings on healthcare, and poverty reduction.

Extended cost-effectiveness analysis methods are applied to quantify, across quintiles of socio-economic status, the health benefits gained, the additional tax revenues raised, and the net financial consequences for households from a 50% increase in the price of tobacco through excise taxes. The increase in tobacco tax is estimated to result in 65,000 (95% CI: 37,000–93,000) premature deaths averted, 25% of them in the poorest quintile, $300M ($256–340M) of additional tax revenues, 12% borne by the poorest quintile, $23M ($13–33M) of out-of-pocket spending on healthcare averted, 36% of which accrue to the poorest quintile, 9% to the richest. These savings would be associated with 23,000 (13,000–33,000) poverty cases averted (63% in the poorest quintile).

 

Source:

Salti N, Brouwer E, Verguet S. The Health, Financial and Distributional Consequences of Increases in the Tobacco Excise Tax Among Smokers in Lebanon. Social Science & Medicine 2016; 170: 161-169. http://dcp-3.org/resources/health-financial-and-distributional-consequences-increases-tobacco-excise-tax-among