Regressive or Progressive? The Effect of Tobacco Taxes in Ukraine

Tobacco taxes are usually considered regressive, as the poorest individuals allocate larger shares of their budget toward the purchase of tobacco-related products. However, because these taxes also discourage tobacco use, some of the most adverse effects and their economic costs are reduced, includi...

Full description

Bibliographic Details
Main Author: Fuchs, Alan
Other Authors: Meneses, Francisco
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2017
Series:World Bank E-Library Archive
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
LEADER 02050nmm a2200241 u 4500
001 EB002105119
003 EBX01000000000000001245209
005 00000000000000.0
007 cr|||||||||||||||||||||
008 221013 ||| eng
100 1 |a Fuchs, Alan 
245 0 0 |a Regressive or Progressive?  |h Elektronische Ressource  |b The Effect of Tobacco Taxes in Ukraine  |c Alan Fuchs 
260 |a Washington, D.C  |b The World Bank  |c 2017 
300 |a 28 p 
700 1 |a Fuchs, Alan 
700 1 |a Meneses, Francisco 
041 0 7 |a eng  |2 ISO 639-2 
989 |b WOBA  |a World Bank E-Library Archive 
490 0 |a World Bank E-Library Archive 
028 5 0 |a 10.1596/1813-9450-8227 
856 4 0 |u http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-8227  |x Verlag  |3 Volltext 
082 0 |a 330 
520 |a Tobacco taxes are usually considered regressive, as the poorest individuals allocate larger shares of their budget toward the purchase of tobacco-related products. However, because these taxes also discourage tobacco use, some of the most adverse effects and their economic costs are reduced, including lower life expectancy at birth, higher medical expenses, increased years of disability among smokers, and the effects of secondhand smoke. This paper projects the effects of an increase in the tobacco tax on household welfare in Ukraine. It considers three price-elasticity scenarios among income deciles of the population. The results show that although tobacco taxes are often criticized for being regressive in the short run, in a more comprehensive scenario that includes medical expenses and working years, the benefits of tobacco taxes far exceed the increase in tax liability, benefitting in large measure lower income households. The results also indicate that lower health expenditure seems to be the main driver, because of the reduction in tobacco-related diseases that require expensive treatments. Tobacco taxes are also associated with positive distributional effects related to the higher long-term price elasticities of tobacco consumption