Taxation policy for unhealthy or harmful products – Cost-effective public health intervention in cardiovascular disease prevention

    Authors

    Abstract

    Tobacco use and alcohol consumption are two leading risk factors for development of chronic noncommunicable diseases, including cardiovascular diseases, cancer, lung diseases and liver cirrhosis. Aside from direct healthcare costs for treating these conditions, they can also cause premature mortality of working-age population and related additional financial costs. World Health Organization has identified an evidence-based list of interventions that are highly cost-effective and feasible to implement, so called „best buys“. (1-3) The most notable ones on population level are tax increase on tobacco products and alcohol. Taxation is an effective, low cost intervention, which can significantly reduce the risk of chronic noncommunicable diseases. Ten percent price increase reduces tobacco consumption for 4 to 5%, and alcohol consumption for 6,5%. Therefore, in their strategic documents WHO proposes measures of fiscal and marketing policies to reduce availability, but also consumption, of tobacco products, alcohol, and food products that are high in saturated fat, trans fat, sugar and salt. Taxation is recognized as an efficient legislative tool to reduce tobacco and alcohol consumption, and therefore not only current, but also future healthcare costs. Meanwhile, although the consumption is reduced, the rate of this reduction is not the same as the rate of price increase, and governments still gain additional tax revenue. Tax increase is especially useful as a tool for reduction of tobacco and alcohol consumption in young people, as the increase in price makes these products less available. Besides the reduction in consumption, this also leads to a decrease in the number of young people that develop tobacco and alcohol habit. Research has also shown that majority of non-smokers, but also a significant number of smokers, supports higher tobacco taxes, especially if additional revenue will be used for prevention programs and improvement of the health system. In order to successfully implement excise taxes, it is necessary to have intersectoral collaboration, especially collaboration of the financial and health sector, but also to deal with lobbying and interfering from the tobacco and alcohol industries.

    Keywords

    tax, tobacco, alcohol, prevention, chronic noncommunicable diseases

    DOI

    https://doi.org/10.15836/ccar2018.427

    Literature

    1. World Health Organization. Global status report on noncommunicable diseases 2014. Geneva 2014. Available from: (October 20, 2018). http://apps.who.int/iris/bitstream/handle/10665/148114/9789241564854_eng.pdf
    2. World Health Organization. Global Action Plan for the Prevention and Control of NCDs 2013-2020. Geneva 2013. Available from: (October 20, 2018). http://apps.who.int/iris/bitstream/handle/10665/94384/9789241506236_eng.pdf
    3. Sornpaisarn B, Shield KD, Österberg E, Rehm J, editors. Resource tool on alcohol taxation and pricing policies. Geneva, Switzerland: World Health Organization. 2017. Available from: (October 20, 2018). http://apps.who.int/iris/bitstream/handle/10665/255795/9789241512701-eng.pdf
    Cardiologia Croatica
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    Taxation policy for unhealthy or harmful products – Cost-effective public health intervention in cardiovascular disease prevention

    Extended Abstract
    Issue11-12
    Published
    Pages427
    PDF via DOIhttps://doi.org/10.15836/ccar2018.427
    tax
    tobacco
    alcohol
    prevention
    chronic noncommunicable diseases

    Authors

    Verica Kralj*ORCIDHrvatski zavod za javno zdravstvo, Zagreb, Hrvatska
    Petra ČukeljORCIDHrvatski zavod za javno zdravstvo, Zagreb, Hrvatska
    Ivana Brkić BilošORCIDHrvatski zavod za javno zdravstvo, Zagreb, Hrvatska
    Krunoslav CapakHrvatski zavod za javno zdravstvo, Zagreb, Hrvatska

    *Correspondence email: verica.kralj@hzjz.hr

    Abstract

    Tobacco use and alcohol consumption are two leading risk factors for development of chronic noncommunicable diseases, including cardiovascular diseases, cancer, lung diseases and liver cirrhosis. Aside from direct healthcare costs for treating these conditions, they can also cause premature mortality of working-age population and related additional financial costs. World Health Organization has identified an evidence-based list of interventions that are highly cost-effective and feasible to implement, so called „best buys“. (1-3) The most notable ones on population level are tax increase on tobacco products and alcohol. Taxation is an effective, low cost intervention, which can significantly reduce the risk of chronic noncommunicable diseases. Ten percent price increase reduces tobacco consumption for 4 to 5%, and alcohol consumption for 6,5%. Therefore, in their strategic documents WHO proposes measures of fiscal and marketing policies to reduce availability, but also consumption, of tobacco products, alcohol, and food products that are high in saturated fat, trans fat, sugar and salt. Taxation is recognized as an efficient legislative tool to reduce tobacco and alcohol consumption, and therefore not only current, but also future healthcare costs. Meanwhile, although the consumption is reduced, the rate of this reduction is not the same as the rate of price increase, and governments still gain additional tax revenue. Tax increase is especially useful as a tool for reduction of tobacco and alcohol consumption in young people, as the increase in price makes these products less available. Besides the reduction in consumption, this also leads to a decrease in the number of young people that develop tobacco and alcohol habit. Research has also shown that majority of non-smokers, but also a significant number of smokers, supports higher tobacco taxes, especially if additional revenue will be used for prevention programs and improvement of the health system. In order to successfully implement excise taxes, it is necessary to have intersectoral collaboration, especially collaboration of the financial and health sector, but also to deal with lobbying and interfering from the tobacco and alcohol industries.

    Literature

    1. 1.
      World Health Organization. Global status report on noncommunicable diseases 2014. Geneva 2014. Available from: (October 20, 2018).Link
    2. 2.
      World Health Organization. Global Action Plan for the Prevention and Control of NCDs 2013-2020. Geneva 2013. Available from: (October 20, 2018).Link
    3. 3.
      Sornpaisarn B, Shield KD, Österberg E, Rehm J, editors. Resource tool on alcohol taxation and pricing policies. Geneva, Switzerland: World Health Organization. 2017. Available from: (October 20, 2018).Link