1 / 17

Ministry of Health of the Republic of Uzbekistan « Health -2» Project

World Bank. Ministry of Health of the Republic of Uzbekistan « Health -2» Project. Changes in budget revenues and tobacco consumption, if tobacco products excise rates are increased. Shukurov Sh . – « Health -2» Project Specialist Yurecly A. – World Bank consultant.

kellington
Download Presentation

Ministry of Health of the Republic of Uzbekistan « Health -2» Project

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. World Bank Ministry of Health of the Republic of Uzbekistan «Health-2» Project Changes in budget revenues and tobacco consumption, if tobacco products excise rates are increased Shukurov Sh. – «Health-2» Project SpecialistYurecly A. – World Bank consultant December 13, 2007, Tashkent, Uzbekistan

  2. Excise tax rates and budget revenues from cigarettes taxation in Uzbekistan Budget tax revenues increase along TP excise tax rate increase Reference year– 1996 2

  3. Change in real GDP per capita, nominal and real excise tax rate/pack during 1997-2005 the real increase in excise tax rate is not backed up by annual inflation rate real GDP nominal excise tax rate real excise tax rate Baseline – 1996

  4. Revenues from excise taxes for TP in the period of 1997-2005 in real and nominal terms Real increase of excise tax revenues does occur, which requires correcting excise tax rates taking into account annual inflation rate Reference year– 1996

  5. Excise tax rates and budget revenues from cigarettes taxation in Uzbekistan Budget tax revenues increase along TP excise tax rate increase Reference year– 1996

  6. In 2005, reduction of excise tax resulted in decrease of budget revenue * Note: most popular brands

  7. How higher taxes can be good for population health? Increase in prices of tobacco products change the smoking habits. The tax increase results in the reduction of consumption: A 10% price increase reduces the consumption by 4% in developed countries 8% in developing countries Price elasticity for tobacco products ranges from (-0.4) to (-0.8) Developed states Developing states

  8. Forecast of budget revenues and tobacco products consumption in case of excise tax rise Increase of excise tax rate will provide for budget tax revenue increase Reference year– 2005

  9. Forecast of share of budget revenues and consumption of TP, in case excise tax rate is increased Excise tax rate rise will provide for increased budget tax revenues Reference year – 2005

  10. Forecasts of total budget revenue (excise tax plus VAT) from cigarettes in case of excise tax increase Increase of excise tax rate will provide for increased budget revenues Reference year– 2005

  11. Change in smoking attitude of men when the price of cigarettes increases by 100% despite the increase in prices, many smokers will still continue to smoke

  12. According to the data of Ministry of Finance of the Republic of Uzbekistan, in 2003, illegal import of cigarettes comprised around 28,9%In most countries, similar volume of illegally trafficked cigarettes is observed, reaching 30% Share of illegal import of cigarettes in the total volume of cigarettes consumption in Uzbekistan (2003)

  13. Share of illegal import of cigarettes in the total volume of cigarettes consumption in Uzbekistan (2005) Illegal import of cigarettes in the Republic of Uzbekistan comprises 10.4%, illegal imports level of 28,9% cannot be confirmed

  14. Conclusions of the economic review • Increase of retail and import prices for cigarettes by 10%: • Will increase rates of illegal trafficking by 13%, but • Tax revenues to the budgets of the countries will increase anyway (14%) despite the reduction of the world consumption (1.1%) and loss of tax revenues (5,5%) caused by trafficking.

  15. Article 7. The Law «About licensing of certain types of activity in the Republic of Uzbekistan» «Licensed types of activity include those, rendering which could violate rights and legal interests, harm health of citizens and breach public safety, and which can not be regulated by any other methods, but licensing». Consequently, production of ‘Nas’ can be referred to a licensed type of activity, as its consumption can harm health of the citizens.

  16. ‘Nas’ harm reduction • ‘Nas’ quality standardization • Licensing of ‘Nas’ production and trade • Introduction of excise tax for ‘Nas’ • Establishment of a systematic monitoring • Changing of adequate administrative and criminal measures

  17. Conclusion Win-win situation both for the public health and the economy in general 1. Increase of excise tax rates for tobacco products will lead to: • Reduction of tobacco smoking, especially among young people • Increase of budget revenues despite of expected losses due to illegal trafficking 2. Regulating of production and trade of ‘Nas’ and its taxation will lead to: • Limiting access of the youth to the ‘Nas’ • Additional source of budget revenues will appear

More Related