Does raising tobacco taxes reduce the burden of non-communicable diseases? A panel data analysis of 152 countries.

Abstract

Globally, about 74% of deaths are attributed to non-communicable diseases (NCDs). Tobacco use is one of the key risk factors of NCDs. Tobacco taxes can discourage the use of tobacco. However, how increasing tobacco taxation may reduce the burden of NCDs is not well studied. This study examines whether higher cigarette taxes are associated with reduced premature deaths-death before the age of 70-from NCDs using multicountry panel data. The study analysed country-level panel data of 152 countries from 2008 to 2020 collected from various sources. The annual burden of NCDs was measured by the proportion of deaths due to NCDs before age 70 in each country. The tax rate on cigarettes-both specific and total-was used as a key explanatory variable. Other covariates include MPOWER score net of taxes, tobacco prevalence and other country-level characteristics. Panel data regressions with various combinations of country and year fixed effects were used to estimate the association between tobacco taxation and the burden of NCDs. Cigarette tax was significantly (p<0.05) associated with the burden of NCDs, with an increase in tobacco tax as a per cent of retail price from the current average 47%-75% being associated with a 2-percentage point decrease in the proportion of deaths due to NCDs before age 70 years. A Monte Carlo simulation with 10,000 iterations confirmed the robustness of this effect, estimating an average reduction of 1.09 percentage points (95% uncertainty interval: -1.76 to -0.42, i.e. reduction by 0.42 to 1.76 percentage points) in premature NCD mortality. Access to healthcare, obesity, and clean fuel and cooking technology were also found to be associated with the burden of NCDs. The results are robust to various model specifications. The study provides important evidence that increasing tobacco taxation could be an effective tool in reducing the burden of NCDs. Countries aiming to curb the burden of NCDs could consider raising tobacco taxes.