1. Source: facebook.com

2. Every day 115 Romanians die because of tobacco related diseases.
This means people every year.
1 in 3 adolescents in Romania are using tobacco, 5 times more than in the USA.
Source: Eurobarometer 2017,
Societatea Română de Cardiologie, Societatea Română de Pneumologie și Fundația Română a Inimii
(Romanian Society for Cardiology, Romanian Society for Pneumonology and Romanian Heart Foundation)

3. Tobacco taxation and its impact in Romania
Árpád Szabó
Partium Christian University, Oradea
Workshop on Tobacco Economics in Southeastern Europe
Belgrade, December 11, 2018

4. Tobacco taxation and its impact in Romania Content of the Presentation
A Greater Research Project
Economic Impacts of Tobacco in Romania
Major findings
The Anti Tobacco Law and Its Impacts
Taxation

5. A research project: Building Tobacco Research Capacity for Romania
Cooperation between Wake Forest School of Medicine and the University of Medicine and Pharmacy Tirgu Mures, Romania. Researchers from Romanian universities and other institutions (lead by Zoltán ÁBRÁM) guided by mentoring teams from USA (lead by Kristie Long FOLEY) and Hungary (lead by Péter BALÁZS).

6. Building Tobacco Research Capacity for Romania - Projects
Community-Based Prevention and Cessation of Tobacco Use Among Young Adolescents
School-based Prevention & Cessation of Tobacco Use Among Adolescents
Smoking habits of medical students at the UMPh Tg. Mures /Smoke Free University Project
Adopting Systems-Level Changes to Promote Cessation Among Residents in Social Institutions
Economic Impacts of Tobacco in Romania
Air Quality Monitoring for SHS Exposure and Policy Advocacy
Smoking and SHS Exposure among Pregnant Women & Children

7. Economic Impacts of Tobacco in Romania
Research Team: Árpád SZABÓ, Partium Christian University, Oradea Ede LÁZÁR, Sapientia University Miercurea Ciuc Hunor BURIÁN , Sapientia University Miercurea Ciuc Mentors: Todd ROGERS, RTI International Frank J CHALOUPKA, University of Illinois at Chicago József BODROGI, Eötvös Lóránd University, Budapest

8. Romania – Country profile
19.9 million inhabitants (2014)
10932,3 GDP per capita (constant 2010 US$)
25840,8 GDP per capita, PPP (current international $)
nearly deaths in 2016 from a disease caused by smoking
- the costs of treating smoking-attributable diseases was over RON 1.2 billion in 2012, (approximately 5.4% of overall health care spending that year.)

9. Estimates of Adult Smoking Prevalence, Romania
Eurobarometer 2017:
Prevalence among 15 years and older: 28%
Men: %
Women: 19%
Source: Romanian Society for Cardiology, Romanian Society for Pneumonology and Romanian Heart Foundation
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

10. Smoking Prevalence, Eurobarometer March 2017 Romania

11. Estimated prevalence 1981-2011
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

12. Prevalence in the 15-24 age group: 33%
Smoking Prevalence among 16 Year Old Students,
Eurobarometer 2017:
Prevalence in the age group: %
Source: Romanian Society for Cardiology, Romanian Society for Pneumonology and Romanian Heart Foundation
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

13. Cigarette Sales,
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

14. Cigar and Smoking Tobacco Sales, 2001-2015
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

15. No job losses! Drops: From 16805 to 801 hectares
From to 1219 tons
No job losses!
Source: National Institute for Statistics, 2018

16. ,
Source: National Institute for Statistics, 2018

17. Tobacco Control Policy in Romania
Romania signed the WHO’s Framework Convention on Tobacco Control (FCTC) in June 2004, and ratified it in January 2006.
Tobacco product advertising on radio and television has been prohibited since 2002
Romania has required graphic health warning labels on cigarette packages since 2008
Law number 15 of 2016 entirely prohibits smoking in all enclosed public spaces, in all enclosed work spaces, in vehicles of public transport, and in all enclosed or open playgrounds. Smoking is also prohibited in health, educational and child protection institutions.

18. Tobacco Taxes in Romania
Upon acceding the EU, in 2007 Romania became subject to the EU's tobacco tax directive (Council Directive 2002/10/EC).
Requirements:
a specific tax on cigarettes between 5% and 55% of the total tax (including the value added tax)
the total excise tax to account for at least 57% of the tax-inclusive retail price of cigarettes (TIRSP) in the most popular price category (MPPC)
the total excise tax to be at least €64 per 1000 cigarettes (€1.28 per pack of 20 cigarettes).
Romania and other EU accession countries had until the end of 2009 to come into compliance with these standards.

19. Tobacco Taxes in Romania
Council Directive 2011/64/EU included several important changes:
the specific tax to account for between 7.5% and 76.5% of the total tax
the minimum excise tax share was increased to at least 60% of TIRSP, with the price now based on the weighted average price of cigarettes sold in the market
it increased the minimum excise per 1000 cigarettes to €90 (€1.80 per pack).
Selected EU member states were allowed a transition period, until the end of 2017, to come into compliance with the new directive.
Romania came into compliance with the directive by the beginning of 2015.

20. Cigarette Taxes per Pack, May 2004 - July 2016
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

21. Cigarette Excise Taxes per Pack and Cigarette Excise Tax Revenues, 2007 - 2015
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

22. Price for a Pack of 20 Cigarettes, Most Sold Brand, European Countries, 2014 in US$ at Official Exchange Rates
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

23. Taxes on a Pack of 20 Cigarettes, Most Sold Brand, European Countries, 2014, in US$ at Official Exchange Rates
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

24. Inflation Adjusted Cigarette Prices and Cigarette Affordability, 1997-2015
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

25. Inflation Adjusted Cigarette Prices and Per Capita Cigarette Consumption, 2001 - 2015
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

26. Before our study, no studies have estimated the price elasticity of demand for tobacco products in Romania (Loubeau 2013).
Our first cigarette demand analysis used annual aggregate cigarette sales data and the average price the price for a local brand of cigarettes sold in mid-priced stores from 1997 through 2015.
We estimated that the price elasticity of cigarette demand in Romania is -0.58, implying that a ten percent increase in the inflation adjusted price of cigarettes would result in an almost six percent reduction in cigarette consumption.
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

27. Our second cigarette demand analysis used the cross-sectional data from the 2011 GATS.
In this model, we estimated that cigarette consumption among smokers is negatively and statistically significantly associated with average cigarette price.
The average price elasticity derived from the regression coefficient for the price is -1.45, implying that a ten percent increase in the price of cigarettes reduces cigarette consumption among smokers by 14.5 percent.
Given our use of a single cross-sectional survey, this estimate is likely to overstate the price elasticity of cigarette demand because the market level price measure we constructed from the self-reported prices in the survey reflect local brand choices and smokers' purchase behaviors.
Source: Szabó Á, Lázár E, Burián H, Rogers T, Foley K, Ábrám Z, Meghea C, Ciolompea T, Chaloupka FJ.: The Economics of Tobacco and Tobacco Taxation in Romania, University of Medicine and Pharmacy of Tîrgu Mureş, Romania, 2016

28. Model parameters, baseline
Impact of Increasing Cigarette Excise Taxes on Smoking
Model parameters, baseline
Current smokers
4,451,871
Premature deaths in current smokers
2,225,936
Expected future smokers
938,988
Premature deaths in future smokers
469,494
Average cigarette excise tax
8.6
Average cigarette price
14.5
Excise tax as a percentage of price
59.5%
Total Tax as a percentage of price
76.1%

29. Impact of Increasing Cigarette Excise Taxes on Smoking, Smoking-Attributable Mortality and Government Revenue — Romania 2017
Model projections
Increased average cigarette tax
11.0
12.3
18.2
Increased average cigarette pack price
17.3
18.9
25.9
Excise tax as a percentage of price
63.3%
65.0%
70.0%
Total tax as a percentage of price
80.0%
81.7%
86.7%
Assumed price elasticity
-0.6
Reduction in number of current smokers
258,360
403,289
1,054,917
Reduction in Premature Deaths Caused by Smoking among Current Smokers
90,426
141,151
369,221
Percentage of premature deaths in current smokers averted by higher taxes
4.1%
6.3%
16.6%
Reduction in number of future smokers
108,987
170,124
445,006
Reduction in Premature Deaths Caused by Smoking among Future Smokers
54,493
85,062
222,503
Percentage of premature deaths in future smokers averted by higher taxes
11.6%
18.1%
47.4%
Total reduction in number of smokers
367,347
573,413
1,499,923
Total Reduction in Premature Deaths Caused by Smoking
144,920
226,213
591,724
Percentage of premature deaths among all smokers averted by higher taxes
5.4%
8.4%
22.0%
Additional Cigarette Excise Tax Revenues (RON Millions)
1,008.1
1,348.7
884.3

30. Presentation of our Report in the Budget and Finances Committee of the Romanian Parliament

31. The Impact of Raising Taxes on Tobacco Products Simulation Based on Price Elasticity
Recommended
Average accise tax
8,60 RON
12,30 RON
Average price per pack
14,50 RON
18,90 RON
Accise tax as % of price
59,5%
65,0%
Would make 400,000 adults to quit smoking
Would stop 170,000 persons to start smoking
Would prevent over 225,000 premature deaths
Would raise with RON 1.3 billion the incomes of the budget

32. Presentation of our Report in the Budget and Finances Committee of the Romanian Parliament
Recommendations
(1) Implement a large increase in the cigarette excise tax that significantly raises cigarette prices and reduces cigarette smoking in Romania.
(2) Include annual adjustments in cigarette taxes that ensure that the affordability of cigarettes is reduced as incomes increase.
(3) Increase taxes on other tobacco products to be equivalent to cigarette taxes and to reduce the use of these products.
(4) Increase the amount of earmarked tobacco taxes and allocate some of the new earmarked revenues to tobacco prevention and cessation efforts.
(5) Strengthen tobacco tax administration, increase enforcement, and eliminate dutyfree sales of tobacco products in order to control tax avoidance and evasion.

33. What happened after the „anti smoking” law (15/2016)
You should know that smoking in bars was not forbidden, it just became a privilege of wealthy ones. If you want to light up a cigarette inside, it costs you 500 RON (120 EUR)
The new anti-tobacco law did not bother too much the smokers, but managed to bring them out to the streets.
Source:

34. What happened after the „anti smoking” law (15/2016)
The MP who advocated most strongly for the law (Aurelia Cristea) was not included on the list of her party’s candidates for the next parliamentary elections (late 2016)
The analysis of the 2016 tax report data from the tax collecting agency shows that the revenues of restaurants increased by 19,8% and that of bars by 5,1% compared to the previous year (Ramona Brad, „Smoke Free Romania Coalition”)
Our colleagues in the project made PM 2.5 measurements in universities and public institutions. First measurements were made before the law was applied, then 3 month after the application and finally one year later by. The second measurements have shown a sharp decrease, but after a year the PM 2.5 values in public institutions were almost at the same level as at the first time.

35. What happened after the „anti smoking” law (15/2016)
On a European scale of tobacco control policies Romania advanced on the 7th place in Europe from 19th.
The 2017 Eurobarometer says, that
exposure to smoke decreased:
In bars
- from 80% to 11%
In restaurants
from 59% to 6%
Opposition legislative proposal:
Electronic cigarettes should be treated
By the law exactly as normal cigarettes.

36. Current Level of Taxes on Tobacco in Romania

37. Current Level of Taxes on Tobacco in Romania
The level of excise taxes is adjusted every year, based on the previous years’ September prices:
- on April 1 for cigarettes
- on January 1 for other tobacco products
For year 2019:
Cigarettes: ,87 RON/1000 cigarettes
Cigars and cigarillos: 48,87 RON/1000 pieces
Tobacco for roll on your own: 63,52 RON/kg

38. The Impact of Differentiated Taxation on Tobacco Products in Romania
Example:
Marlboro
Heets
Weight
Tax
Tax 
1 unit (cigarette)
645 mg
RON
201.5 mg
0.077 RON
1 pack (20 cigarettes)
8.97 RON
1.54 RON
1 kg tobacco mg
RON
384 RON

39. Thank you!