Economics of Tobacco Taxation in Egypt

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Economics of Tobacco Taxation in Egypt
Ashraf S. E. Saleh Arab Academy for Science, Technology & Maritime Transport (AAST&MT) Khaled Hanafy Arab Academy for Science, Technology & Maritime Transport (AAST&MT) Frank J. Chaloupka University of Illinois at Chicago 10th February 2009

Table of content
i. ii. iii.

iv. v. vi. vii. viii.

Introduction Tobacco Use and its Consequences in Egypt Supply of Tobacco and Tobacco Products in Egypt Tobacco Control in Egypt Cigarette Taxes and Prices in Egypt The Demand For Cigarettes in Egypt Impact of Cigarette Tax Increases in Egypt Summary and Recommendations

I. Introduction
Egypt is the largest tobacco consuming country in the Arab region Cigarette smoking and waterpipe use account for nearly all tobacco use, with nearly 60 percent of male adults and almost three percent of female adults currently smoking tobacco

II. Tobacco Use and its Consequences in Egypt

Country Profile

Population 74.033 million (2008) Population growth rate 2% per year. 43 % of the population lives in urban areas 57 % in rural areas one-third of the population under the age of 15 years and only 5 % about 65 years. About one in six Egyptians lives in poverty, Since 1991 a transition process from a centralized to a market-oriented economy Unemployment 8.9 % (2007)

Adult Tobacco Use

Adult Prevalence of Tobacco Smoking Daily Tobacco Smoking Males Females Both 39.2% 0.4% 19.1% Current Tobacco Smoking 59.3% 2.7% 29.9%

Source: WHO 2008.

Youth Tobacco Use

tobacco use prevalence 17.6 % male and 8.6 % female students (13 to 15 years) (CDC, 2007). Prevalence of cigarette smoking 6.0 % of boys and 1.2 % of girls prevalence of other tobacco product 13.9 % for boys and 7.9 % for girls (CDC, 2007). other tobacco products – 22.3 %for boys and 14.1% for girls

Tobacco Product Consumption

Total Cigarette Consumption, Egypt, 1970-2004

Source: WHO report on the global tobacco epidemic, 2008, The MPOWER package

Cigarette Consumption, Egypt, 1990-2005
80 1000

70

900

800 Total Cigarette Consumption (billions) 60 700 50 Per Capita Cigarette Consumption

600

40

500

30

400

300 20 200 10

100

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Cigarette Consumption (billions) Per Capita Cigarette Consumption

0

Source: ERC Group, 2005

Estimated Prevalence of Water Pipe Use, 2005 Rural Male 18 and older Younger than 18 13.6% Female 0.0% Male 10.5% Urban Female 0.1%

3.7%

NA

2.8%

NA

Source: WHO 2006.

Health and Economic Consequences of Tobacco Use

Smoking- Related Disease Impact in Egypt Mortality from Cancer, Respiratory and Circulatory Diseases, 2000 Numbers of deaths /World age – standardized rate per 100,000 population

Female Male Disease Trachea lung and bronchus cancer Lip, oral cavity and pharynx cancer Respiratory diseases Number 904 Rate 14.5 Number 348 Rate 4.8 Age 35+

124

2.0

87

1.1

35+

2720

50.4

2061

32.9

35+

Source: World Health Organization (WHO). Mortality database, Geneva: WHO.

Male Disease Ischemic heart diseases Stroke Other diseases of the circulatory system All causes Number 5280 13563 30613 Rate 93.1 253.1 542.6

Female Number 3833 12828 25199 Rate 60.9 207.9 398.6 Age 35+ 35+ 35+

317812

5665.4

266126

4227.8

35+

Source: World Health Organization (WHO). Mortality database, Geneva: WHO.

III. Supply of Tobacco and Tobacco Products in Egypt

Tobacco Farming

Tobacco farming has long been banned in Egypt Illegal tobacco growing occurs in the Upper Nile region for personal use All tobacco leaf used in producing tobacco is imported. In 2007, Malawi, China Brazil and India were the primary sources of tobacco leaf, while Italy, the Syrian Arab Republic, and the United States have also been important sources in previous years

Cigarette Manufacturing

Limited imports of cigarettes and other tobacco products...
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