Tobacco taxes in Latin America

Octubre2017
Diciembre2018

The South American Network on Applied Economics/Red Sur launched the research “Tobacco taxes in Latin America” as part of a global project focused on studying the different options for tax policies as an effective tool to reduce the levels of tobacco consumption. The University of Illinois at Chicago’s (UIC) Institute for Health Research and Policy facilitates this global effort on the economics of tobacco through a web-based platform called “Tobacconomics.”

 

Red Sur leads Latin-American studies on tobacco taxes, focusing on Argentina, Brazil, Ecuador, Mexico and Peru, where 263.000 people die annually due to tobacco related causes.**

 

In Latin America, there have been important tax reforms with the goal of reducing tobacco consumption. However, these reforms have often fallen short of the intended purposes.  New and additional increases in tobacco taxes have been blocked by concerns about potential negative economic impacts from tobacco tax increases, often fuelled by vested interests from the tobacco industry.

 

Evidence from around the world shows that higher tobacco taxes and prices, along with other tobacco control policies, such as smoke free laws and selling bans reduce the toll of tobacco related deaths and bring in new revenues, which can finance health and development efforts.

 

This initiative aims to accelerate these processes and will focus on:

  • Alternative strategies for reducing affordability of tobacco products, such as indexation of taxes to offset inflation and rising incomes, with incremental increases.
  • Social and economic costs of tobacco use, including healthcare expenditures, lost productivity.
  • Supply side effects of increased tobacco taxes, including labor, farming, and/or manufacturing impacts.
  • Impacts of increased tobacco taxes on inequality, in particular progressivity and poverty impacts of tobacco production and use.
  • Use of tobacco taxation as an instrument to reduce tobacco consumption targeted to support achievement of the Sustainable Development Goals (SDGs).
  • Tax administration and compliance aspects related to tobacco taxation including tax avoidance, evasion and illicit trade.

UIC is a core partner of the Bloomberg Philanthropies’ Initiative to Reduce Tobacco Use. This Bloomberg Philanthropies initiative’s main goals are to raise awareness of the harms caused by tobacco and assist low and middle-income countries implement strong tobacco control policies to reduce tobacco use. Over the past ten years, the initiative has supported 59 countries in passing tobacco control laws or policies, reaching nearly 3.5 billion people and saving an estimated 30 million lives.

 

List of studies and research teams:

 

Technical Regional Coordination: Fernando Lorenzo (President, Red Sur, CINVE) and Oscar Cetrángolo (IIEP-UBA-CONICET, Red Sur),  with the collaboration of Carlos Grau (CINVE, Red Sur) and Pedro Velasco (UNLP, IIEP-UBA-CONICET, Red Sur).

 

Accelerating effective tobacco taxes in Latin America. The Argentinian case / Acelerando la fiscalidad efectiva al tabaco en América Latina. El caso argentino
Lead researcher: Ricardo Rozemberg
Research team: Ricardo Rozemberg, Gabriel Bezchinsky, Ariel Melamud and Patricia Rizzi Centro iDeAS, Universidad Nacional de San Martín (UNSAM), Argentina.

 

Impact of recent tobacco tax reforms in Argentina / Impacto de las recientes reformas impositivas al Tabaco en Argentina
Researchers: Martín González-Rozada and Julio Berlinski
Instituto Torcuato Di Tella (ITDT) – Red Sur

 

Health and productivity costs due to tobacco consumption in Mexico / Costos en el sector salud y en la productividad por el consumo de tabaco en México
Lead researcher: Liliana Alvarado
Research team: Liliana Alvarado, Claudia Córdova and Dalia Toledo
Ethos, Laboratorio de Políticas Públicas

 

Consequences of special tobacco taxes in Mexico: inequality, consumption and poverty / Efectos de impuestos especiales al tabaco en México: desigualdad, consumo y pobreza
Lead researcher: Luis Huesca Reynoso
Research team: Luis Huesca Reynoso, Cuauhtémoc Calderón Villareal, Linda Irene Llamas Rembao, Guy Lacoix and Abdelkrim Araar
Centro de Investigación en Alimentación and Desarrollo (CIAD)

 

Evidence and economic analysis for sustainable policies: a tax strategy in Peru /  Evidencia y análisis económico para políticas sustentables: una estrategia de impuestos en Perú
Lead researcher: Carlos De los Ríos
Research team: Carlos De los Ríos, Hugo Córdova and Marco Ugarte
Instituto de Estudios Peruanos (IEP)

 

Sources:

*PAHO-WHO, 2016, "Informe regional sobre el control de tabaco”.

 **IECS, "Carga de enfermedad atribuible al tabaco", www.iecs.org.ar.

 

Period: 01 October 2017 to 31 December 2018.