Health Taxes and Illicit Trade: Evidence and Courses of Action

Norman Maldonado-Vargas

Chapter 10 in Health Taxes:Policy and Practice, 2023, pp 295-306 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Well-designed health taxes increase the price of the taxed good, leading to important price differentials with other countries, and potentially creating incentives to exploit arbitrage of price differences through illicit trade. This section reviews the discussion on health taxes and illicit trade, in order to give technicians and policymakers guidance on the available evidence on magnitude, effects, causes and possible courses of action to deal with the problem while simultaneously moving forward on health taxes. The section does not intend to be a systematic literature review about health taxes and illicit trade; instead, it focuses on the most robust evidence on this area, and the references cited provide a rich set of additional information for the reader to deepen the discussion in much further detail. The section focuses on illicit trade of tobacco and alcohol, because there is no evidence on illicit trade on sugar-sweetened beverages (SSBs). Finally, as a word of caveat, the evidence and policies on tobacco control are more robust than those on alcohol and that is also the case on illicit trade…

Keywords: Health Tax; Health Taxes; Tobacco Tax; Alcohol Tax; Sugary Drinks Tax; SSB Tax; Sugar-Sweetened Beverages Tax; Fiscal Policy; Health; Non-communicable Diseases; NCDs; Health Financing; Public Finance; Public Health (search for similar items in EconPapers)
JEL-codes: I1 I15 K32 (search for similar items in EconPapers)
Date: 2023
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