Tobacco Tax and Tobacco Consumption in Slovakia
Tobacco Tax and Tobacco Consumption in Slovakia

Author(s): Martin Geško
Subject(s): Business Economy / Management, Substance abuse and addiction, Fiscal Politics / Budgeting
Published by: Masarykova univerzita nakladatelství
Keywords: tobacco tax; economics of tobacco; tobacco policy; demand for cigarettes; elasticity;
Summary/Abstract: Selective consumption taxes and particularly the excise tax on tobacco and tobacco products represent the important source of income for the state budget of the Slovak Republic. In 2016 the tobacco tax revenue amounted to EUR 673.2 million, which represents 6.12% share of the total tax revenues.As the argument for increasing the excise taxes on tobacco products the idea that selective excise taxes have a significant impact on reducing the consumption of the taxed commodities, and thus contribute to mitigating the negative effects associated with their consumption, is widely used. The price sensitivity of the tobacco consumers has been indicated by several scientific papers, mainly from various health organizations. The aim of this paper is to verify whether the development of the excise tax on tobacco and tobacco products in SR indicates the sensitivity of the Slovak tobacco consumers to increased tax rates and prices as well as to determine the factors which could influence their elasticity.

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