Measuring changes in the illicit cigarette market using government revenue data: the example of South Africa

dc.creatorvan Walbeek, Corne
dc.date2014-06-24T09:03:51Z
dc.date2014-06-24T09:03:51Z
dc.date2014
dc.date.accessioned2015-05-28T10:06:41Z
dc.date.available2015-05-28T10:06:41Z
dc.date.issued2015-05-28
dc.descriptionThe tobacco industry claims that illicit trade in cigarettes has increased sharply since the 1990s and that government has lost substantial tax revenue. Our studies objectives were: (1) To determine whether cigarette excise tax revenue has been below budget in recent years, compared with previous decades. (2) To determine trends in the size of the illicit market since 1995. Methods For (1), mean percentage errors and root mean square percentage errors were calculated for budget revenue deviation for three products (cigarettes, beer and spirits), for various subperiods. For (2), predicted changes in total consumption, using actual cigarette price and GDP changes and previously published price and income elasticity estimates, were calculated and compared with changes in tax-paid consumption. Results Cigarette excise revenues were 0.7% below budget for 2000–2012 on average, compared with 3.0% below budget for beer and 4.7% below budget for spirits. There is no evidence that illicit trade in cigarettes in South Africa increased between 2002 and 2009. There is a substantial increase in illicit trade in 2010, probably peaking in 2011. In 2012 tax-paid consumption of cigarettes increased 2.6%, implying that the illicit market share decreased an estimated 0.6 percentage points. Conclusions Other than in 2010, there is no evidence that illicit trade is significantly undermining government revenue. Claims that illicit trade has consistently increased over the past 15 years, and has continued its sharp increase since 2010, are not supported.
dc.identifiervan Walbeek C. (2014). Measuring changes in the illicit cigarette market using government revenue data: the example of South Africa, Tobacco Control: doi:10.1136/tobaccocontrol- 2013-051178
dc.identifierhttp://tobaccocontrol.bmj.com/content/early/2014/01/15/tobaccocontrol-2013-051178.abstract
dc.identifierhttp://hdl.handle.net/11090/733
dc.identifier.ris TY - Journal Article DA - 2015-05-28 DB - OpenUCT DP - University of Cape Town KW - Tobacco control KW - Illicit trade in cigarettes KW - Tax revenue from cigarettes KW - Excise tax revenue LK - https://open.uct.ac.za PB - University of Cape Town PY - 2015 T1 - Measuring changes in the illicit cigarette market using government revenue data: the example of South Africa TI - Measuring changes in the illicit cigarette market using government revenue data: the example of South Africa UR - http://hdl.handle.net/11090/733 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11090/733
dc.languageen
dc.publisherTobacco Control
dc.publisher.departmentSALDRUen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subjectTobacco control
dc.subjectIllicit trade in cigarettes
dc.subjectTax revenue from cigarettes
dc.subjectExcise tax revenue
dc.titleMeasuring changes in the illicit cigarette market using government revenue data: the example of South Africa
dc.typeJournal Article
uct.type.publicationResearchen_ZA
uct.type.resourceArticleen_ZA
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