2018年-世界发展银行全球_The_Health_Gains_Financial_Risk_Protection_Benefits_and_Distributional_Impact_of_Increased_Tobacco_Taxes_in_Armenia_13页_992kb

Summary of "The Health Gains, Financial Risk Protection Benefits, and Distributional Impact of Increased Tobacco Taxes in Armenia"

Core Content

This study examines the health, financial, and distributional impacts of increasing tobacco taxes in Armenia, using a mixed-methods approach that combines Extended Cost-Effectiveness Analysis (ECEA) with stakeholder interviews. The goal is to evaluate whether the regressivity argument against tobacco taxation is valid and to understand the factors that enabled the adoption of higher tobacco taxes in 2015.

Main Points

• High Smoking Prevalence in Armenia:
  Smoking is widespread, particularly among men (53% of adult males smoke compared to 2% of females). It is more prevalent among poorer socioeconomic groups, with 60% prevalence in the second and third wealth quintiles.

• Low Tobacco Tax Rates:
  Armenia has some of the lowest tobacco tax rates in Europe and Central Asia. The excise tax rate was only 17% (specific) and 17% (VAT), totaling 34% of the retail price of the most sold cigarette brand in 2014.

• Policy Context:
  Armenia was the first former Soviet Union country to ratify the WHO Framework Convention on Tobacco Control (FCTC) and adopted a national tobacco control law in 2005. However, tax increases were not implemented, and the country lagged behind its neighbors in tobacco control.

• Tobacco Tax Increase in 2015:
  The Armenian government approved a tax increase in 2015, raising the excise tax to about 75% of the retail price. This was the first time such a policy was successfully adopted, despite concerns about regressivity.

• Health Gains:
  Increasing tobacco taxes to 75% of retail price would avert approximately 88,000 premature deaths among current smokers and non-initiators. The greatest impact would be on the bottom two quintiles, with half of all tobacco-related deaths averted in these groups.

• Financial Benefits:
  The tax increase would lead to significant reductions in out-of-pocket (OOP) expenditures and government savings.

  • Government savings: ~$26 million from reduced tobacco-related disease treatment costs for those covered by the publicly funded Basic Benefits Package (BBP).
  • OOP savings: ~$63 million for non-BBP beneficiaries, with 37% of savings accruing to the poorest quintile and 30% to the middle quintile.

• Poverty and Catastrophic Expenditures Averted:

  • 22,000 poverty cases would be averted, with 27% of these cases in the second poorest quintile and 14% in the richest.
  • 33,000 cases of catastrophic expenditures (health spending >10% of individual consumption) would be avoided.

• ECEA Findings:
  The ECEA showed that increased tobacco taxes could be progressive in Armenia, particularly for the poor, as they spend a larger proportion of their income on tobacco. The health and financial benefits outweigh the potential regressive effects, especially when considering the reduction in medical impoverishment and catastrophic health expenditures.

• Regressivity Argument:
  While the regressivity argument was initially raised, the study found that the ECEA results played a key role in countering this concern. The Eurasian Economic Union (EAEU) accession and fiscal constraints created a window of opportunity for the tax increase to be adopted.

• Policy Adoption Factors:
  Two main factors contributed to the successful adoption of tobacco tax increases:

  1. Tobacco tax increases were bundled with other tax reforms, including labor income tax.
  2. Harmonization with EAEU tax policies was seen as an inevitable step, which helped build political support.

Key Information

• Price Elasticity:
  The study used a price elasticity of -0.54, estimated from Kyrgyzstan, which is within the range of -0.40 to -0.80 for developing countries. Poorer quintiles showed higher price responsiveness (e.g., -0.74 for the poorest, -0.28 for the richest).

• Modeling Approach:
  The model simulated the effects of a 75% excise tax rate, leading to a 145% increase in cigarette prices. The model estimated health, financial, and distributional outcomes based on smoking prevalence, disease-specific treatment costs, and consumption quintiles.

• Methodological Tools:

  • ECEA: Assessed health gains, financial risk protection, and distributional impacts.
  • Stakeholder interviews: Identified the political and economic context that facilitated the adoption of the tax increase.

• Policy Implications:
  The study underscores that tobacco tax increases can be equitable when considering the broader health and financial benefits. The regressivity argument, while often cited, is not sufficient to prevent the adoption of such policies if supported by comprehensive analysis and political context.

Conclusion

The research demonstrates that increasing tobacco taxes in Armenia can lead to substantial health improvements, financial savings, and reduced poverty and catastrophic health expenditures, particularly among the poor. The ECEA findings played a critical role in refuting the regressivity argument, and policy context, such as the EAEU accession and fiscal pressures, helped facilitate the adoption of the tax increase. This highlights the importance of integrating health and economic analyses in policy-making to ensure both public health and equity outcomes.