From Iceland — Tobacco Consumption Drops While Taxes Rise

Tobacco Consumption Drops While Taxes Rise

Published October 9, 2013

Raising taxes on tobacco products appears to be connected to a 10% drop in consumption, and taxes may be raised again.
Vísir reports that, according to data from The State Alcohol and Tobacco Company of Iceland (ÁTVR), the 20% increase on tobacco tax in 2012 had the effect of reducing cigarette sales by 10% in the first nine months of 2013.
Viðar Jensson, a project manager at the Directorate of Health, told reporters, “According to the World Health Organisation, raising taxes on tobacco is the most promising way to reduce smoking and the ill health effects it causes.”
While the news would appear to be cause for worry at ÁTVR, sales director Einar S. Einarsson told reporters that their revenue for the previous year actually increased.
Good thing, too, as the 2014 budget proposal calls for raising tobacoo taxes even further. By how much is still undefined; the budget still needs to be voted on by parliament.

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