Asia 11 study on illicit tobacco in 2012 Andy Logan Associate Director, Oxford Economics 2 July 2014.

Slides:



Advertisements
Similar presentations
P4 - explain how internal and external factors affect UK
Advertisements

A compelling case for joint action on tobacco use and smoking in Blackpool Andrea Crossfield, Director Tobacco Free Futures.
1 Frank J. Chaloupka Distinguished Professor, UIC Director, WHO Collaborating Centre on the Economics of Tobacco and Tobacco Control Tax Avoidance & Evasion.
Julie Stratton, Manager, Epidemiology Peel Public Health
Homework #11 Government Finance. Some suggest that states are addicted to their vice taxes. This certainly might be true with a unit excise tax on cigarettes.
Production of Statistics on Informal Sector Employment and Informal Employment in Namibia By Panduleni C Kali.
Kidane Asmerom and Teh wei-Hu
CHAPTER 7 ANALYSIS OF A TARIFF.
International Tax and Investment Center Presenter: Elizabeth Allen 1.
 2007 Johns Hopkins Bloomberg School of Public Health Illicit Trade in Tobacco Products Vinayak M. Prasad, MD Director, Ministry of Health and Family.
Negative externalities: smoking
Measuring Economic Performance
1 The economics of tobacco control in Jamaica: Will the pursuit of public health place a fiscal burden on the government? Presentation to the Public Forum,
Copyright ©2004 Pearson Education, Inc. All rights reserved. Chapter 14 Stock Analysis and Valuation.
Tobacco Tax/Price Policies and Smoking Behavior Andrew Hyland, PhD Roswell Park Cancer Institute February 2, 2011
WORKSHOP ON INDUSTRIAL STATITICS, 8 – 10 JULY 2013 COUNTRY PRESENTATION MALDIVES.
Alicia Menendez The University of Chicago June 23, 2009.
Investment in Philippines…. Economy of Philippines…. GDP of the Country:  In 2009: $320.4 billion  In 2008: $318.2 billion  In 2007: $306.6 billion.
The Demand for and Supply of Cessation Products & Services Frank J. Chaloupka University of Illinois at Chicago.
C H A P T E R © 2007 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin The Global Marketing Environment 2.
Some Thoughts after Compiling 2008 SUT of China CHEN Jie Department of National Accounts NBS, China March 2012, Shanghai.
VIRTUAL BUSINESS RETAILING
Access to health care, social protection, and household costs of illness proposal Cost of illness working group INDEPTH AGM 2009, Pune.
Research Findings of China’s Tobacco Tax Ji Liang Research Center for Fiscal Science, Ministry of Finance Lijiang, China Oct.19, 2011.
 2007 Johns Hopkins Bloomberg School of Public Health Section B A Look Ahead: Summary of Main Findings.
 A group of individuals or organizations that share similar characteristics  Respond in the same way to a product  Products may appeal to a different.
Carmela Pascucci – Istat - Italy Meeting of the Working Party on International Trade in Goods and Trade in Services Statistics (WPTGS) Linking business.
15.835: Entrepreneurial Marketing
Principles of Macroeconomics: Ch 10 Second Canadian Edition Chapter 10 Measuring a Nation’s Income © 2002 by Nelson, a division of Thomson Canada Limited.
Tackling the Illicit Trade – JTI’s Approach Sofia, June
ECONOMICS OF TOBACCO CONFERENCE SCHOOL OF ECONOMICS, UCT JULY 2014 Illicit trade in South Africa: Can we trust the industry rhetoric? Corné van Walbeek.
Is use of illicit tobacco associated with reduced motivation to stop smoking and making a quit attempt? Belinda Iringe-Koko, Ann McNeill, Robert West and.
African Centre for Statistics United Nations Economic Commission for Africa Expert Group Meeting to review the “Handbook on SUT: Compilation, Application.
Global Adult Tobacco Survey (GATS) Funded by Bloomberg Philanthropies.
1 Presentation to OG6 Canberra, Australia May 2011 Statistical Uses of Administrative Data in Canada.
1 Selected Issues with Implementation of 2008 SNA (continued) Training Workshop on System of National Accounts for ECO Member Countries October 2012,
The Attitude of the Croatian Employer’s Association on Croatia’s Underground Economy Natasa Novakovic, CEA Zagreb, September 1, 2015.
 2007 Johns Hopkins Bloomberg School of Public Health Illicit Trade in Tobacco Ayda A. Yurekli, PhD Research for International Tobacco Control International.
© 2007 Thomson South-Western. 1 Measuring a Nation’s Income Microeconomics is the study of how individual households and firms make decisions and how.
3rd ICP 2011 Technical Advisory Group Meeting at the OECD, Paris 10, 11 June 2010.
Do tax increases on tobacco hurt the poor? Some findings from South Africa Corné van Walbeek School of Economics University of Cape Town.
WTO Committee on Trade and Development Seminar on Revenue Implications of E-Commerce Geneva, 22 April 2002 Revenue Implications of E-Commerce: The Development.
Monitoring at the Household Level Methods, Problems, and Use of Critical Information.
Tobacco and China A Complex Challenge By Ayda A. Yurekli, Ph.D World Bank, Washington DC Ministerial Level Economics of Tobacco Control Seminar, Beijing,
Future Development of Asian Electronics Industry May 17, 2004 Japan Electronics & Information Technology Industries Association.
Bodrogi József Szeged, 17th of June Introduction This lecture is about smuggling but its goal is to assess the size of tobacco consumption in Hungary.
ECONOMIC IMPACT OF CIGARETTES Facts and Figures.  Nicorette, e-stick, etc. Substitute for Cigarettes.
Economic, social, and security impacts of tobacco excise duty harmonization in the EU Líberální Institut Conference, 20 September 2006 Prague Costs and.
Non-observed economy in Kyrgyz Republic The National Statistical Committee of Kyrgyz Republic Sultanaliev M.K. – Leading specialist of the Department of.
Statistics Division Beijing, China 25 October, 2007 EC-FAO Food Security Information for Action Programme Side Event Food Security Statistics and Information.
Copyright 2010, The World Bank Group. All Rights Reserved. Producer prices, part 1 Introduction Business Statistics and Registers 1.
Taxes.  Adam Smith, 1776 – the “invisible hand of the market”  Markets allocate resources using the price mechanism (shortage, surplus, equilibrium)
Excise taxes as a mechanism for tobacco control : South Africa’s experience Corné van Walbeek Chief researcher of the Economics of Tobacco Control Project,
Regional Seminar: Tobacco prices and taxes, and Illicit trade of tobacco products | July 2012, Panama City 1 |1 | Lessons learned from worldwide.
Measuring a Nation’s Income
The Role of Epidemiological Surveillance in Tobacco Control Yang Gonghuan China CDC/PUMC.
Sofia, 3 June 2011 Illicit tobacco: tax policies and the risks of organised crime.
TQS Analysis and Reporting Orientation Workshop on TQS 3-4 May 2016 Ankara, Turkey.
The Global Marketing Environment. Learning Objectives After studying this chapter, you should be able to: Understand the nature of the marketing environment.
The South African Experience
Kentucky Tobacco Tax Facts 2014
The Economics of Cigarette Taxes
Tobacco Taxation and Combating Illicit Trade of Tobacco: Lessons Learned Volkan Çetinkaya Senior Economist.
Impact of a Total Legalization of Marijuana on
ACCELERATING PROGRESS ON EFFECTIVE TOBACCO TAX POLICIES IN MONTENEGRO
Economics of Tobacco in Serbia after 2000
WHO FCTC Article 20 Building a Sustainable Tobacco Control Monitoring and Surveillance System Jeffrey Drope, Ph.D. – Scientific.
Markus Burgener – Programme Coordinator
A Look Ahead: Summary of Main Findings
Ministry of Health of the Republic of Uzbekistan
Presentation transcript:

Asia 11 study on illicit tobacco in 2012 Andy Logan Associate Director, Oxford Economics 2 July 2014

Methods to estimate the scale of illicit cigarettes Smoker surveys Empty pack and cigarette butt collection and analysis Household surveys/consumption estimates compared with tax-paid products Seizures International trade data

Empty pack surveys Collect empty packs and analysing discarded butts. Industry recognizes EPS as best practice as evidence of actual activity. Run by external agency.

A few minor problems with EPS Geographical coverage – e.g. is the coverage of urban vs rural locations appropriate? Timing of survey – e.g. is there a possibility that the findings are not representative as they cover periods when tourist flows are greatest? Brand coverage – e.g. does the survey exclude important brands given market composition? Packs versus sticks – e.g. how does the survey treat differences in pack size and what implications does this have for estimates of non-domestic/illicit incidence? Other tobacco products (OTPs) – e.g. to what extent do the surveys include the illicit trade in OTPs?

Direct surveys of smokers Asking samples of smokers where they buy their tobacco products. Advantage Provides a more direct route to assessing the size of the problem of illicit purchases at any point in time. Problems Respondents under report the extent to which they smoke. Under report the extent they consume illegal products. May not even be aware that they are purchasing illicit tobacco.

Compare duty paid to estimates of consumption Legitimate Consumption Duty Paid Consumption Cross-boarder shopping Duty Free Illegitimate Consumption Total Consumption Legitimate Consumption

Compare duty paid to estimates of consumption 2 Total consumption Estimates of prevalence (proportion of the population that smokes cigarettes) Estimates of cigarette consumption per smoker An uplift factor covering under-reporting Estimates of the adult population Problems: (1)There are some smokers who do not admit they smoke (2)Some of the smokers who admit they smoke do not know how much, or choose to under-report the amount

Seizures by police or customs authorities The quantity of illegal cigarettes seized by the authorities Advantages Official government statistics. Useful to understand illicit trade routes. Problems with this measure Can only represent a small proportion of the illicit trade. If comparing over time, ignores effort and expenditure levels of the enforcement authorities. Some element of luck.

Using trade data Focuses on inwards flows of cigarettes into a country Does the value of country A’s exports of tobacco to country B should equal B’s imports from A. Advantages Trade data readily available. Problems Different countries’ trade recording systems have different accuracies. Exchange rate valuations.

Lessons on measurement techniques All five methods have their strengths and weaknesses. Empty pack surveys are probably the best method of calculating the size of the illicit market. Useful to repeat the same method over time to understand whether the illicit trade is growing or decreasing and at what rate. But should monitor a number of the methods to see if you get a consistent picture.

Asia 11 report To establish credible estimates of consumption of illicit cigarettes and the impact this has on tobacco tax revenue for 11 markets in Asia. To do this it: Validate illicit incidence levels, reviewing and refining estimates currently available through Empty Pack Surveys and other sources. Estimate Illicit Consumption in terms of volume, including where possible a breakdown by country/market of origin and a breakdown between legal and Illicit Consumption. Estimate annual government revenue losses from excise, VAT/GST, and earmarked taxes on cigarettes.

Countries in the study

Whole market

Asia-11: Consumption breakdown

Estimates of individual country shares

Estimates of the number of illicit cigarettes

Estimates of illicit market share

Estimates of tax losses

Further analysis of illicit

Estimated make-up of illicit in each country

Conclusions from Asian 11 report In 2012, 9% of cigarettes consumed in Asia-11 were illicit. Illicit share was over 25% in five markets (Hong Kong, Malaysia, Singapore, Pakistan, and Brunei) Illicit volumes were highest in Pakistan, Vietnam, and Malaysia. Domestic illicit cigarette volumes were highest in Pakistan and the Philippines. Asia-11 government tax revenue losses from Illicit Consumption totalled US$ 3.4 billion in 2012.

Thank you