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 towards 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...

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Main Authors: Fuchs, Alan, Meneses, Francisco
Format: Report
Language:English
Published: World Bank, Washington, DC 2017
Subjects:
Online Access:http://documents.worldbank.org/curated/en/765671507036953947/Regressive-or-progressive-the-effect-of-tobacco-taxes-in-Ukraine
http://hdl.handle.net/10986/28575
id okr-10986-28575
recordtype oai_dc
spelling okr-10986-285752021-05-25T09:04:44Z Regressive or Progressive? : The Effect of Tobacco Taxes in Ukraine Fuchs, Alan Meneses, Francisco TAXATION REGRESSIVE TAX TOBACCO CONTROL TOBACCO TAX Tobacco taxes are usually considered regressive as the poorest individuals allocate larger shares of their budget towards 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. Results show that although tobacco taxes are often criticized for being regressive in the short-run, 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. Our 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. 2017-10-25T19:18:23Z 2017-10-25T19:18:23Z 2017-09-27 Report http://documents.worldbank.org/curated/en/765671507036953947/Regressive-or-progressive-the-effect-of-tobacco-taxes-in-Ukraine http://hdl.handle.net/10986/28575 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Economic & Sector Work :: Other Public Sector Study Economic & Sector Work Europe and Central Asia Ukraine
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic TAXATION
REGRESSIVE TAX
TOBACCO CONTROL
TOBACCO TAX
spellingShingle TAXATION
REGRESSIVE TAX
TOBACCO CONTROL
TOBACCO TAX
Fuchs, Alan
Meneses, Francisco
Regressive or Progressive? : The Effect of Tobacco Taxes in Ukraine
geographic_facet Europe and Central Asia
Ukraine
description Tobacco taxes are usually considered regressive as the poorest individuals allocate larger shares of their budget towards 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. Results show that although tobacco taxes are often criticized for being regressive in the short-run, 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. Our 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.
format Report
author Fuchs, Alan
Meneses, Francisco
author_facet Fuchs, Alan
Meneses, Francisco
author_sort Fuchs, Alan
title Regressive or Progressive? : The Effect of Tobacco Taxes in Ukraine
title_short Regressive or Progressive? : The Effect of Tobacco Taxes in Ukraine
title_full Regressive or Progressive? : The Effect of Tobacco Taxes in Ukraine
title_fullStr Regressive or Progressive? : The Effect of Tobacco Taxes in Ukraine
title_full_unstemmed Regressive or Progressive? : The Effect of Tobacco Taxes in Ukraine
title_sort regressive or progressive? : the effect of tobacco taxes in ukraine
publisher World Bank, Washington, DC
publishDate 2017
url http://documents.worldbank.org/curated/en/765671507036953947/Regressive-or-progressive-the-effect-of-tobacco-taxes-in-Ukraine
http://hdl.handle.net/10986/28575
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