Strategies for NCD Risk Factors(cont...)

Figure 7.1 Share of total and excise taxes in the price of 20 piece pack of the most sold brand of cigarettes (top) and for the most sold brand of bidis (bottom), South Asia, 2008

Source: WHO 2008b

To reduce consumption, the tax level should increase the actual retail price. This is an area where the tobacco industry can reduce profit margins to maintain consumption rates by keeping prices low. For the most sold brand, an almost 10-fold variation in price is found between countries (Figure 7.2).

2008 Figure 7.2 Price of the most sold and cheapest brand of cigarettes (top) and most sold 20 pack of bidis (bottom), (US$)

Source: WHO 2008b.

The rationale for regional harmonization of tax policy is the potential for negative externalities

associated with increased consumption due to access to cheaper tobacco products in neighboring

countries and the increased risk of smuggling that such large cost variations create.