Cigarette vs Economy

Cigarettes vs Economy: Myths and Facts

Myth:
The cigarette industry contributes with a large amount of state income.

Fact:
The state pays a greater cost for cigarettes than the revenue it receives from the tobacco industry. Research from the World Bank has shown that cigarette merupakankerugian mandatory for almost all countries. Revenues received from the state tobacco industry (taxes, etc.) may be a large amount, but the direct and indirect losses caused by tobacco consumption is much greater.

The high costs to be incurred to pay for the healing of diseases caused by smoking, absence from work, loss of productivity and income, premature deaths, and also makes people become poor longer because they spend money to buy cigarettes.

Other major costs are not easy to pin down, including reduced quality of life of the smoker and those who become passive smokers. Besides suffering also for those who have lost loved ones because of smoking. All of this is a high cost to be borne.

Myth:

Reducing cigarette consumption is an issue that can only be overcome by the rich countries.

Fact:
Right now approximately 80% of smokers live in developing countries and this figure has been growing rapidly in a few decades. It is estimated that by 2020, 70% of all deaths attributable to tobacco will occur in developing countries, up from current levels of 50%. This means that in the decades to come in developing countries will face higher costs to pay for health care and lost productivity smokers.

Myth:

Setting tighter against tobacco industry will result in the loss of jobs in the level of tobacco farmers and cigarette factory.

Fact:
Predictions indicate clearly that the global cigarette consumption will increase in the next three decades, even with the implementation of tobacco control worldwide. Indeed, with reductions in tobacco consumption, then a time will result in reduced employment in the tobacco farmer level. But this happens in a matter of decades, not overnight. Therefore, the government will have plenty of opportunity to plan for a sustainable and orderly transition.

The independent economists who have studied the claims of the tobacco industry, the tobacco industry finds that greatly exaggerate the potential loss of jobs from setting more stringent smoking. In many countries cigarette production only a small part of their economy. Research conducted by the World Bank demonstrates that in general, the country will not get a new unemployment if cigarette consumption is reduced. Some countries actually will gain new advantages for consumers of cigarettes will allocate the money to buy other goods and services. This will certainly open up opportunities for the creation of new jobs.

Myth:
The government would lose revenue if they raise taxes on tobacco industry because fewer people will buy cigarettes.

Fact:
Evidence is clear: calculations show that higher taxes will reduce cigarette consumption does not reduce government revenue but, quite the opposite. This could occur because the amount of the decline in cigarette consumers are not comparable with the amount of tax increase. Consumers who are addicted will usually slow to respond to rising prices (will still buy). Furthermore, the amount of money saved by those who quit smoking will be used to purchase other goods (the government would still receive an income). Experience says that raising the cigarette tax, no matter how high, never cause a reduction in government revenue.

Myth:
Higher cigarette taxes will lead to smuggling.

Fact:
The cigarette industry is often argued that higher taxes will encourage smuggling of cigarettes from countries with lower cigarette taxes, which ends will make higher tobacco consumption and reduce government revenue.

Although smuggling is a serious matter, the 1999 World Bank report Curbing the Epidemic still concluded that higher cigarette taxes will depress consumption and increase government revenue. The exact steps for the government is fighting crime and instead of sacrificing tax hike on cigarettes.

In addition there are the claims saying that the tobacco industry is also involved in cigarette smuggling. Such claims should be addressed seriously.

Myth:
Smoking addiction is so high, raising the cigarette tax will not reduce the demand for tobacco. Therefore no need to raise the cigarette tax.

Fact:
Raising cigarette taxes will reduce the number of smokers and reducing deaths caused by smoking. The increase in the price of cigarettes will make some smokers to quit and prevent others to become smokers or prevent others become regular smokers. The increase in the cigarette tax will also reduce the number of people who return to smoking and reducing cigarette consumption in those who continued to smoke. Children and youth who are sensitive to cigarette price increase, therefore, they will reduce the purchase cigarettes when taxes on cigarettes by.

In addition people with a low opinion also more sensitive to price increases, hence the increase in cigarette taxes will have a big impact on cigarette purchases in developing countries.
The model developed by the World Bank in its report Curbing the Epidemic shows the increase in cigarette prices by 10% due to the increase in the cigarette tax, will make 40 million people living in the year 1995 to quit and avert at least 10 million deaths due to smoking.

Myth:
The government does not need to raise the cigarette tax because it will be the increase will hurt low-income consumers.

Fact:
Tobacco companies argued that the price of cigarettes should not be increased because if so would harm low-income consumers. However, research shows that low-income people are victims of the most disadvantaged cigarettes. Because smoking will aggravate the burden of life, increase mortality, increase health care costs they must bear and wasted salary to buy cigarettes.

Low-income people could benefit from the most expensive cigarette prices because it will make them easier to quit smoking, reduce or avoid smoking addiction because of more limited their ability to purchase. Another advantage of higher cigarette taxes are to be used for welfare programs for the poor.

Myth:
Smoker bear its own costs of smoking.

Fact:
Smokers membenani nonsmokers. Evidence that costs nonsmokers such as health costs, disruption and irritation were obtained from cigarette smoke.

Reviews in rich countries revealed that smokers weigh on health insurance than those who did not smoke (although age smokers usually shorter). If the health insurance paid by the people (such as social security), the smokers would come from smoking charge to others as well.

source : http://www.seatca.org/upload_resource/202.doc

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