2013年-世界发展银行全球_Economics_of_Tobacco_Toolkit_Tool_4___Design_and_Administer_Tobacco_Taxes_50页_974kb

Summary of "Design and Administer Tobacco Taxes"

I. Introduction

This tool provides guidance on understanding the structure, design, and administration of tobacco taxes. The primary aim is to help stakeholders, including public health advocates, policy makers, tax administrators, and government officials, engage effectively in discussions about tobacco taxation.

Key Concerns

• Consumers may already pay consumption taxes, so additional tobacco taxes may seem burdensome.
• Policy makers must balance efficiency and equity when setting tax rates.
• Tax administrators need accurate methods to forecast revenue and manage tax collection.
• Public health advocates should understand how to design taxes that effectively reduce tobacco use.

II. Key Information

Definitions

• Excise Tax: A tax on selected goods (e.g., tobacco) produced or imported into a country. Collected at the producer or final sale to the consumer.

  • Specific Tax: A fixed amount per unit (e.g., $1.50 per pack).
  • Ad Valorem Tax: A percentage of the product’s value (e.g., 45% of the manufacturer’s price).

• Excisable Good: Goods that are subject to excise taxes, typically those with:

  • Close government supervision.
  • Inelastic demand.
  • Considered luxuries rather than necessities.
  • Negative externalities or lack of merit.

• Sales Tax: Can be single-stage (applied at one point in the supply chain) or multi-stage (applied at multiple stages, including VAT).

• Value-Added Tax (VAT): A multi-stage tax applied to the value added at each stage of production and distribution. Often includes excise taxes.

Assumptions and Requirements

• Readers should have background knowledge on tobacco policies and tax structures in their country.
• Some countries use alternative taxes instead of excise taxes (e.g., China uses other taxes on tobacco).
• The tool assumes all tobacco products are considered in the analysis, not just cigarettes.

III. The Rational for Tobacco Excise Taxes

Why Tax Tobacco?

Tobacco excise taxes are justified for three main reasons:

1. Fiscal Reasons:

   • Tobacco taxes are an effective source of revenue for governments.
   • They are easier to collect than income taxes, especially in countries with limited tax collection capacity.
   • They can be used to cover the external costs of tobacco use.

2. Public Health Reasons:

   • Tobacco use leads to significant health risks and deaths.
   • Higher taxes reduce consumption, particularly among the poor, young, and new users.
   • Tax revenue can be used to improve public health insurance coverage.

3. Correcting for Negative Externalities:

   • Tobacco use imposes costs on non-users (e.g., secondhand smoke).
   • Excise taxes help internalize these external costs.
   • Higher taxes can lead to more economically efficient consumption decisions.

IV. What is the “Right” Tax Rate?

Determine the Best Tax Rate

• Tax rate decisions are complex and require balancing multiple objectives (revenue, public health, efficiency).
• Factors influencing decisions include:
  • Risk of smuggling and tax evasion.
  • Administrative capacity.
  • Income levels.
  • Tax rates in neighboring countries.
  • Political considerations.

Evaluate Tax Efficiency and Equity

• Tax Efficiency: Aims to maximize revenue with minimal distortion to consumer behavior.

  • Taxes with inelastic demand (e.g., tobacco) are more efficient.
  • Efficiency loss (deadweight loss) is the reduction in consumer welfare due to higher prices.

• Tax Equity: Involves fairness in tax treatment.

  • Horizontal equity: Equal treatment of equal individuals.
  • Vertical equity: Unequal treatment of unequal individuals (e.g., regressive tax impact on lower-income groups).

• Trade-off: Efficiency and equity often conflict. Policy makers must weigh these considerations based on their goals.

Make Tax Efficient

• Tax rates should be set to maximize revenue while minimizing deadweight loss.
• Higher taxes on inelastic goods are more efficient.
• The formula to estimate the contribution of excise tax revenue to total tax revenue is:

$$
\mathrm {T E R} / \mathrm {T T R} = (\mathrm {T E R} / \mathrm {C S C}) \times (\mathrm {C S C} / \mathrm {G D P}) \times (\mathrm {G D P} / \mathrm {T T R})
$$

• The percentage share of excise tax revenue to total excise tax revenue is:

$$
\mathrm {T E R} / \mathrm {E R} = (\mathrm {T E R} / \mathrm {C S C}) \times (\mathrm {C S C} / \mathrm {G D P}) \times (\mathrm {G D P} / \mathrm {T T R}) \times (\mathrm {T T R} / \mathrm {E R})
$$

V. Generate Higher Excise Revenues

• Forecasting is essential for effective tax policy.
• Revenue forecasting considers:
  • Tax rate.
  • Consumer spending on tobacco.
  • Proportion of taxes to GDP.
• Econometric models are used to estimate the impact of tax changes on revenue.

VI. Consider the Appropriate Type of Tobacco Tax

Imposing Excise Taxes

• Excise taxes are preferred for tobacco products due to their:
  • Ease of administration.
  • Ability to generate stable revenue.
  • Effectiveness in reducing consumption.

Choose Between Specific and Ad Valorem Taxes

• Specific Taxes: Easier to administer and less prone to evasion.
• Ad Valorem Taxes: More flexible and can adjust with price changes.
• Hybrid Taxes: Combine elements of both to balance administrative ease and responsiveness to price.

VII. Administer Tobacco Taxation and Revenues

Key Administration Elements

• Compliance: Ensure accurate and consistent tax collection.
• Registration and Licensing: Facilitate monitoring and control.
• Timing of Payment: Important for cash flow and revenue forecasting.
• Bonding: Prevents tax evasion and ensures compliance.
• Physical Controls: Stamps, floor-stock taxes, and earmarked taxes help prevent smuggling and ensure revenue collection.

Revenue Use and Refunds

• Revenue from tobacco taxes can be used for public health initiatives.
• Earmarked taxes ensure that funds are directed to specific purposes.
• Refunds and credits can be used to reduce the burden on consumers, especially the poor.

VIII. Conclusion

• Tobacco taxes are an effective tool for both revenue generation and public health improvement.
• They can be designed to reduce consumption, protect children, and correct for negative externalities.
• The design and administration of tobacco taxes require careful consideration of efficiency, equity, and revenue forecasting.

IX. Additional References

• The tool includes references to studies and models that support the rationale and administration of tobacco taxes.
• It encourages further reading on poverty, demand analysis, and tax equity for a deeper understanding of the implications of tobacco taxation.