Many countries attempt to control cigarette consumption through strategies of imposing taxes and tobacco excise duties. However, these policies are implemented differently in each country, resulting in inconsistent effectiveness.
Tobacconomics, a research institution from the United States, assesses the performance of cigarette tax and excise policies using four indicators:
* The comparison of cigarette prices between countries based on purchasing power parity;
* The average annual change in cigarette prices;
* The amount of cigarette tax and excise duty; and
* The structure of cigarette tax and excise duty.
Tobacconomics then assigns a score on a scale of 0 to 5. The higher the score, the better the performance of the cigarette tax and excise policy in that country is considered.
Ecuador and New Zealand received the highest scores. Following them are the United Kingdom, Canada, Botswana, France, Peru, Seychelles, Bahrain, and Chile, with scores detailed in the graph.
Indonesia only received a score of 2.38, placing it 81st out of 160 countries researched in 2020.
"The WHO considers the highest achievement to be reached by countries that impose a tax of at least 75% of the retail price of cigarettes," stated Tobacconomics in its report, *Cigarette Tax Scorecard (2nd Edition)*.
Tobacconomics emphasizes that a good cigarette excise policy must be able to drive up cigarette prices faster than the increase in public income. They also believe that cigarette excise policies should have a simple structure.
"A multi-tiered cigarette excise tariff structure, with rates varying based on price, cigarette length, presence of a filter, cigarette packaging, and other factors, makes cigarette taxation more difficult to implement and therefore less effective," it concluded.