The most effective approach to controlling the spread of tobacco use is through policies that directly reduce the demand for it. The most potent and cost-effective option for governments everywhere is the simple elevation of tobacco prices by use of consumption taxes.
On average, a 10 percent price increase on cigarettes could reduce demand by about four percent in high-income countries and by 4-8 percent in low- and middle-income countries, where lower incomes tend to make people more sensitive to price changes.
Article 6 of the WHO Framework Convention on Tobacco Control, Price and Tax Measures to Reduce the Demand for Tobacco, recognizes the importance of this policy and calls on governments to implement tax and price policies to contribute to their national health objectives.
The WHO is committed to helping governments design intelligent tobacco tax policy that best satisfies these dual goals of tobacco use reduction and revenue generation. An additional benefit of greater revenues through tobacco taxes is the possibility of generating an additional pool of funding for health, a practice recommended by the WHO and being adopted with increasing frequency by countries around the globe.
Learn more by reading the WHO Technical Manual on Tobacco Tax Administration.