Public finances and tobacco taxation with product variety

Autor: Théophile Azomahou, Racky Balde, Ibrahima S. Kaba, Pape Yona Mane, Abdoulaye Diagne
Přispěvatelé: Macro, International & Labour Economics, RS: GSBE other - not theme-related research, Maastricht Graduate School of Governance, RS: FSE MGSoG, General Economics 0 (Onderwijs)
Jazyk: angličtina
Rok vydání: 2019
Předmět:
Economics
Social Sciences
Smoking Prevention
Geographical Locations
Tax revenue
Habits
0302 clinical medicine
Medicine and Health Sciences
Smoking Habits
Psychology
Public and Occupational Health
030212 general & internal medicine
Geographic Areas
Multidisciplinary
Public economics
Geography
Simulation and Modeling
Tobacco control
Tobacco Products
POLICY
Senegal
Product (business)
Models
Economic
Medicine
EXCISE
HEALTH
TAXES
Research Article
Marginal cost
Tobacco Control
Science
Political Science
030231 tropical medicine
Nigeria
Context (language use)
Public Policy
Tobacco Industry
Research and Analysis Methods
03 medical and health sciences
Ad valorem tax
Humans
Excise
Behavior
Biology and Life Sciences
Market concentration
Rural Areas
Taxation
People and Places
Africa
Earth Sciences
Finance
Zdroj: PLOS ONE, 14(2):0212015. Public Library of Science
PLoS ONE
PLoS ONE, Vol 14, Iss 2, p e0212015 (2019)
ISSN: 1932-6203
DOI: 10.1371/journal.pone.0212015
Popis: This study endeavors to answer two questions: which category of excise taxes is more appropriate for Senegal and Nigeria and which consequences an increase of the tobacco taxes would have on the price, the demand and the tax revenues in each one of the two countries? To answer these questions, we adopt a double approach: first, a theoretical model of taxation with variety; and second, a simulation model to answer the second question. The results of the theoretical model indicate that, in the context of excise taxation, the number of products variety—or that of cigarette brands—directly affects both the degree of market concentration and the marginal effects of specific and ad valorem excise taxes on the price of tobacco. In addition, the comparison of the marginal effects of ad valorem and specific excise taxes depends on the marginal costs of production of different varieties weighted by the tax rates and the number of varieties. Our empirical results first show that the specific excise taxes are more adapted to Senegal while ad valorem excise taxes fit best Nigeria. This result crucially matters for the excise taxes are exclusively of an ad valorem nature in both Senegal and Nigeria. It is perfectly possible to envisage a situation where the two main forms of excise taxes could co-exist. It also appears from our results that tax development does not have the same implications for the two countries. Increasing tobacco taxes in Senegal strongly reduces the demand, but also induces a decrease in the tax revenues, while this will imply a lesser decline in demand in Nigeria accompanied however by a sharp increase of the country’s tax revenues. This difference stems from the fact that the price-elasticity of tobacco demand is very high in Senegal, contrary to Nigeria. Finally, it is important to mention that there is a specific threshold beyond which the tax increases cease to have a positive effect on tax revenues in Nigeria.
Databáze: OpenAIRE
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