Tobacco Control Program

October 10, 2017


Infographic: "Stop Smoking


Tobacco use, and its negative health, social and economic impacts, is a significant global health challenge.

According to the 2015 World Health Organization (WHO) Report on the Global Tobacco Epidemic, in 2013, 21% of adults globally were current smokers – 950 million men and 177 million women. Despite increasing global population between 2007 and 2013, smoking prevalence has actually declined worldwide from 23% in 2007, preventing an increase in the number of smokers in the world. The total remains at 1.1 billion smokers globally in 2013.

Tobacco use is a leading global disease risk factor and underlying cause of ill health, preventable death, and disability. It is estimated to kill more than 5 million people each year across the globe. If current trends persist, tobacco will kill more than 8 million people worldwide each year by 2030, with 80% of these premature deaths taking place in the developing world.

In 2015, the “Addis Ababa Action Agenda” adopted at the Third International Conference on Financing for Development held in Addis Ababa, Ethiopia -- and later endorsed by the United Nations as part of the Sustainable Development Goals (SDGs) -- recognized that public policies and mobilization, and effective use of domestic resources, underscored by the principle of national ownership, are central to the common pursuit of sustainable development, including achieving the SDGs.

Clause 32 of the Addis Ababa Action Agenda states that price and tax measures on tobacco are viewed as an effective and important means to reduce tobacco consumption and health care costs, and represent a revenue stream for financing for development in many countries.

The Action Agenda also stresses that the tobacco tax agenda is fully consistent with obligations acquired by 180 countries that are parties to the WHO Framework Convention on Tobacco Control (FCTC) (an additional seven countries have signed the FCTC but have not ratified it, and only nine countries are neither signatories or parties to the FCTC).

World Bank Group Tobacco Control Program

The World Bank Group’s Global Tobacco Control Program assists countries in designing tobacco tax reforms as a win-win policy measure to: (i) achieve public health goals by increasing prices, reducing smoking, and preventing initiation among youth, and (ii) raise more domestic resources for investments that benefit the entire population. In addition, it supports countries in fighting the illicit tobacco trade by strengthening customs systems.  Work has been carried out over 2013-2016 in Philippines, Botswana, Ghana, Namibia, Vietnam, Georgia, Indonesia, and Peru; more recently, for the support of tobacco tax reforms adopted in 2017 in Armenia, Colombia, Moldova, Ukraine, and Montenegro, and assessments done over 2016-2017 in Nigeria, Ethiopia, Senegal, Lesotho, Belarus, China, Turkey, Chile, Gabon, Azerbaijan, Indonesia on the employment situation in the tobacco industry, and on the European Union tax harmonization process.  Work is currently underway in Sierra Leone, Trinidad and Tobago, country members of the Organization of Eastern Caribbean States.  In addition, the program supports knowledge exchange, including peer-to-peer advice and support, among selected countries on the economics of tobacco control (for example, through the World Bank Group Flagship Training Program on Health Reform targeting national officials). 

The preparation of a Tobacco Taxation Module as part of WBG/IMF Tax Policy Assessment Framework (TPAF) is underway as part of a new WBG/IMF initiative launched ahead of the Financing for Development Conference in Addis Ababa, held in July 2015, to help member countries strengthen their tax systems. One of the pillars of the initiative includes the development of “improved diagnostic tools to help member countries evaluate and strengthen their tax policies.” Building on their collective expertise, the Bretton Woods Institutions (BWIs) aim to play a fuller role in enabling all of their member countries to assess tax policy performance in order to identify priority tax policy reforms, and design the requisite support for their implementation. The TPAF is a diagnostic framework to provide systematic and structured assessment of a country’s tax policy system, and to develop options for improving such system given a set of policy objectives.

More specifically, the program assists government agencies in developing capacity to assess the health and social costs of tobacco use, and design, enact, administer and monitor tobacco taxation policies. Enhanced capacity will enable countries to increase prices and reduce tobacco use, taking into account the macro-economic and fiscal situation of each country, tax laws, and existing tax administration structure and processes. This process includes assessments and discussions related to fiscal revenues and allocation; smoking patterns and taxes at country level; and socio-economic and health impacts of increasing tobacco tax rates, under different tax policy scenarios, and including impacts on employment, smuggling and other likely impacts of tobacco tax reforms.

The Bank team engaged in this program is multi-sectoral, and includes experts in health, governance, and macro-economics and financial management. Initial discussions are being held to mobilize knowledge and expertise from the International Monetary Fund’s Fiscal Affairs team. The Bank team is also working closely with other international partners, such as the World Health Organization and the Campaign for Tobacco-Free Kids.

The Bank’s Tobacco Control Program is implemented through a multi-donor trust fund financed by the Bill & Melinda Gates Foundation and the Bloomberg Philanthropies. These donors take part in governance of the trust fund and participate in the selection of priority countries included for support under the program.

Joint Learning Network Module: The Joint Learning Network (JLN), connects practitioners and policymakers across countries, facilitating peer-to-peer learning and sharing of knowledge and experience. As part of the Bank’s program, the network is currently developing a Tobacco Tax and Illicit Trade on Tobacco Module targeting member countries in Asia, Africa, Latin American and the Caribbean, and Europe, as well as a diverse group of international, regional, and local partners. The module is expected to focus on tobacco taxation, tax administration, and illicit trade control measures.

In 1991 the World Bank adopted a mandatory operational policy not to lend, invest in, or guarantee investments or loans for tobacco production, processing, or marketing. The Bank’s activities in the health sector discourage the use of tobacco products.

Why the emphasis on tobacco taxation?

Raising taxes on tobacco products is one of the most cost-effective measures to reduce consumption of products that increase mortality , while also generating substantial domestic revenue for health and other essential programs—investments that benefit the entire population. Given this, the World Bank Group Tobacco Control Program gives priority attention to tobacco taxation.

Findings in the 2015 WHO Report on the Global Tobacco Epidemic show that while only 33 countries impose taxes that constitute more than 75% of the retail price of a pack of cigarettes—the taxation level recommended to have an impact on consumption —most countries that do tax tobacco products have extremely low tax rates. And some countries do not have a special tax on tobacco products at all.

Given this situation, the World Bank Group’s program supports governments to look at accumulated country evidence and use tax measures to increase the retail price of tobacco products as one of the best available public health policy measures.

Some important lessons from international experience about how to effectively implement tobacco taxation policy to achieve public health objectives can be adopted and adapted in policy dialogue and operational support to countries. Such lessons include:

  • While nearly all countries tax tobacco products, an excise tax is the most important type of tobacco tax, since it applies uniquely to tobacco products and raises prices relative to prices for other goods and services.
  • Simpler tobacco tax structures are more effective than complex ones, since tiered tax structures are difficult to administer and can undermine the health and revenue impacts of tobacco excise taxes.
  • Use of specific excise taxes enhances the impact of tobacco taxation on public health by reducing price gaps between premium and lower-priced alternatives, which limits opportunities for users to switch to less-expensive brands in response to tax increases. Taxing all tobacco products comparably reduces incentives for substitution.
  • Ad valorem taxes are difficult to implement and weaken tax policy impact. Since they are levied as a percentage of price, companies have greater opportunities to avoid higher taxes and preserve or grow the size of their market by manufacturing and selling lower-priced brands. This also makes government tax revenues more dependent on industry pricing strategies and increases the uncertainty of the tobacco tax revenue stream.
  • Specific excise taxes need to be adjusted for inflation to remain effective.
  • Tax increases should reduce the affordability of tobacco products. In many countries, where incomes and purchasing power are growing rapidly, large price increases are required to offset growth in real incomes.
  • Strong tax administration is critical to minimize tax avoidance and tax evasion, to ensure that tobacco tax increases lead to higher tobacco product prices and tax revenues, as well as reductions in tobacco use and its negative health consequences.
  • Regional agreements on tobacco taxation can be effective in reducing cross-border tax and price differentials and in minimizing opportunities for individual tax avoidance and larger scale illicit trade.

For more information, please contact:

Patricio V. Marquez

Lead Public Health Specialist

World Bank Group Health, Population and Nutrition Global Practice

Email address:

Sheila Dutta

Senior Health Specialist

World Bank Group Health, Nutrition and Population Global Practice


Financial Times Health: World Bank says ‘go big, go fast’ to stub out tobacco

Executive Summary: Tobacco tax reform at the crossroads of health and development : technical report of the World Bank Group global tobacco control program

Tobacco tax reform at the crossroads of health and development : technical report of the World Bank Group global tobacco control program

Economics of Tobacco Farming in Indonesia

Economics of Clove Farming in Indonesia

The Economics of Kretet Rolling in Indonesia

The Economics of Tobacco Taxation and Employment in Indonesia

Policy note on the Economics of Tobacco Taxation and Employment in Indonesia

Progressive or Regressive: The Impact of Tobacco Taxation in Ukraine

The Distributional Consequences of Increasing Tobacco Taxes on Colombia's Health and Finances

The political economy of the 2016 tobacco and proposed sugar-sweetened beverage tax increases in Colombia

Infographic: Stop Smoking: It's Deadly and Bad for the Economy | Spanish | French | Russian

Smoke Screen: Estimating the Tax Pass-Through to Cigarette Prices in Pakistan

WHO: Tobacco Taxation Policy in Kazakhstan

WHO Report: Monitoring tobacco use and prevention policies

Ukraine - Public Finance Review, includes tobacco tax reform as part of comprehensive fiscal reform and broadening tax base effort

Report: Strengthening Domestic Resource Mobilization

Economía | EL PAÍS: Un impuesto al tabaco que puede salvar millones de vidas

The Economist: Smoking: Cough up

WHO: Tobacco and its environmental impact: an overview

Event: Tobacco Taxation Win-Win for Public Health and Domestic Resources Mobilization Conference

Video: Tobacco Taxes in Ukraine: Multiple Gains for Society

Tobacco taxation in the European Union : an overview

Estimating the distributional impact of increasing taxes on tobacco products in Armenia

Tobacco Taxation in Turkey: An Overview of Policy Measures and Results

Cigarette Affordability in China: 2001-2016

Modeling the long-term health and cost impacts of reducing smoking prevalence through tobacco taxation in Ukraine

Presentations of main findings and recommendations of recently released US National Cancer Institute Tobacco Control Monograph Series 21 – The Economics of Tobacco and Tobacco Control February 17, 2017:

  1. Frank J. Chaloupka: World Bank Monograph presentation
  2. NCI's Tobacco Control Monograph Series Presentation to the World Bank Group
  3. Raising Tobacco Taxes: A Summary of Evidence from the NCI-WHO Monograph on the Economics of Tobacco and Tobacco Control

Are tobacco taxes really regressive?: evidence from Chile 

Expanding the global tax base : taxing to promote public goods : tobacco taxes : Summary report

Global economic cost of smoking-attributable diseases

Tobacco Taxation Policy in Slovenia

National Cancer Institute: Monograph 21: The Economics of Tobacco and Tobacco Control

Delhi Declaration Conference of the Parties to the WHO Framework Convention on Tobacco Control Seventh session Delhi, India, 7-12 November 2016

Report: Women in Tobacco Farming: Health, Equality and Empowerment

Thematic issue: Economics of tobacco control in the Americas

Brochure: Working To Assist Governments To Implement the WHO FCTC

Vital Strategies: Sustainable Funding Mechanisms for Population-Level Tobacco Control Communication Programs

IMF: How To Notes: How to Design and Enforce Tobacco Excises?

Video: The Tax That Saves Lives, Gates Foundation

Concept Note: Advancing public health and financing goals under the Universal Health Coverage (UHC) Agenda: A Proposed Tobacco Tax and Illicit Trade Joint Learning Network (JLN) Module

Tobacco Taxes poster

Presentations at “Expanding the Global Tax Base: Taxing to Promote Public Goods, Tobacco Taxes Panel Session” held as part of “Winning the Tax Wars: Global Solutions for Developing Countries” Conference, May 23-24, 2016:

  1. Prof. George Akerlof, 2001 Nobel Prize Laureate in Economics, and University Professor at Georgetown University:  “Phishing for Phools: The Economics of Manipulation and Deception, Taxing to Promote Public Goods, and Tobacco Taxes.” [pdf]
  2. Prof. Philip Cook, ITT/Terry Sanford Professor of Public Policy Studies, Duke University:  “Paying the Tab” The Costs and Benefits of Tobacco and Alcohol Control.” [pdf]
  3. Jason Furman, Chairman, Council of Economic Advisers, Executive Office of the President of the United States: “Policy, Politics, and the Tripling of Federal Tobacco Taxes in the United States to Deter People from Smoking, Save Lives, and Mobilize Revenue over the last 30 years” [pdf]
  4. Jeremias Paul, formerly Under Secretary of Finance of the Philippines and now Coordinator, Tobacco Economics Program, WHO:  “The Impact of the 2013 Sin Tax Reform in the Philippines.” [pdf]
  5. Rose Zheng Ph.D, Director, WHO Collaborating Center for Tobacco and Economics Professor, School of International Trade and Economics (SITE), University of International Business and Economics (UIBE), Beijing, China:  “2015 Tobacco Taxation Reform in China:  Results and Challenges.” [pdf]
  6. Fernando Serra, Tax Adviser, Ministry of Economy and Finance, Uruguay: “Tobacco Taxation and International Litigation:  Uruguay’s Experience.” [pdf]
  7. Patricio V. Marquez, Lead Public Health Specialist, WBG HNP Global Practice “Panel Script” [pdf]

WHO: Get ready for plain packaging brochure - World No Tobacco day 2016

World Bank Live: Winning the Tax Wars: Expanding the Global Tax Base: Taxing to Promote Public Goods, Tobacco Taxes, May 24, 2016

Remarks and Slides:  Six Lessons from the U.S. Experience with Tobacco Taxes, Jason Furman, Chairman, US President's Council of Economic Advisers at World Bank panel on tobacco taxes on May 24, 2016

Framework Convention on Tobacco Control/WHO

WHO mPower Initiative