Table 3 Simulated tax effects on consumption, revenue and number of smokers in Saudi Arabia
| Â | Model predictions | ||
|---|---|---|---|
Year 1 | Year 2 | Year 3 | |
Average cigarette pack price (SAR) | 38 | 40 | 41 |
Average total tax per pack | 30 | 33 | 33 |
Average excise per pack | 23 | 31 | 31 |
Change in price per pack | 44% | 8% | 1% |
Change in average excise per pack | 88% | 33% | 1% |
Import duty as % of final price | 13% | – | – |
Excise tax as % of final price | 62% | 76% | 76% |
Total tax as % of final price | 80% | 81% | 81% |
Assume: e (premium) = −0.2; e (mid-price) = − 0.3; e (economy) = − 0.4 | |||
Change in number of smokers | - 5% | −2% | -0.3% |
Change in prevalence | - 1% | -0.4% | -0.1% |
Change in sales | -11% | −4% | −1% |
Change in excise revenue | 67% | 27% | 0% |
Change in VAT revenue | 28% | 3% | 5% |
Change in import duty revenue | -11% | – | – |
Change in total tax revenue | 44% | 4% | 0.2% |
Change in industry revenue | -10% | −2% | −0.3% |