From 1 to 3 May 2012, global and regional teams from the WHO Tobacco Free Initiative brought together national experts from five countries of the Gulf Cooperation Council (GCC) in the areas of finance, taxes and custom duties to:

train representatives from GCC countries on the module developed on increasing tobacco taxes

introduce the excise system to GCC countries

develop a way forward for the adoption of a new taxation system in member countries of the GCC that will support tobacco control strategies.

Background

As the health consequences of tobacco use become evident, tobacco taxes are considered an effective way to promote public health, finance national tobacco control initiatives, improve health care services and avert significant numbers of premature deaths. Higher prices deter youth from using tobacco and encourage adult smokers to quit.

Despite this, data from the WHO Eastern Mediterranean Region suggest that taxation on tobacco products is one of the most underutilized tools for tobacco control. Tobacco prices and the incidence of taxation are among the lowest compared to the rest of the world. Futhermore, many forms of tobacco use have not been fully brought into the tax net.

High-income countries, in particular, are not using the full potential of the tobacco taxation system. Countries in this group would benefit considerably if appropriate taxation policies were adopted, covering the full spectrum of tobacco products.

Of all the types of taxation, excise taxes are most important as these raise the prices of tobacco relative to other consumer products, providing the dual benefit of additional revenue and reduced consumption.

On average, a 10% increase in price is likely to reduce consumption by 8% for middle-income and by 4% for high-income countries, providing substantial revenues to governments, and outweighing any false arguments being voiced against raising taxation.

The tobacco industry has long argued that higher prices increase cross-border smuggling and illicit trade. Evidence confirms that this is not true. Effective laws to monitor tobacco production, the import and supply chain, and a strong and efficient tax administration system effectively overcome the challenges of illegal domestic and cross-border trade.