The Use of Excise Taxes to Reduce Tobacco, Alcohol, and Sugary Beverage Consumption
In countries around the world, tobacco use, alcohol consumption, and consumption of sugar-sweetened beverages (SSBs) are significant contributors to the global epidemic of noncommunicable diseases. As a consequence, they contribute, as well, to excess health care costs and productivity losses.
A large and growing body of research documents that taxes specific to such products, known as excise taxes, reduce consumption of these products and thereby diminish their adverse health consequences. Although such taxation has historically been motivated primarily by revenue generation, governments are increasingly using these taxes to discourage unhealthy consumption.
This study reviews the global evidence on the impact of taxes and prices on the consumption of these products and the health and social consequences. The study then evaluates arguments commonly raised against these taxes, identify best practices in excise tax policy, and conclude with a summary of the current status of tobacco, alcohol, and SSB excise taxes globally.