“…Price and tax measures are an effective and important means of reducing tobacco consumption by various segments of the population, in particular young persons.”
—WHO Framework Convention on Tobacco Control
Research studies and reports from all over the world show that tax and price increases are among the most effective ways to reduce tobacco use. In high-income countries, a 10 percent rise in price reduces overall cigarette consumption by about 4 percent.
Price increases not only reduce overall cigarette consumption but also decrease the total number of smokers and increase the number of quit attempts.
Price increases also decrease the likelihood that young people will start smoking. And, research suggests that in low-income countries, price increases may have an even greater effect. Tobacco tax increases are a particularly good way to achieve higher prices.
In one document, Philip Morris executives said that "Of all the concerns, there is one - taxation - that alarms us the most. While marketing restrictions and public and passive smoking (restrictions) do depress volume, in our experience taxation depresses it much more severely. Our concern for taxation is, therefore, central to our thinking...."
Tobacco taxes also raise revenue for governments that can be used for health, education, and tobacco cessation services. For example, each year the government of Turkey collects more than 10% of its total revenue, which amounts to billions of dollars, in cigarette taxes.