Economic gains and health benefits from a new cigarette tax scheme in Taiwan: a simulation using the CGE model.
BACKGROUND
This study evaluates the impact of an increase in cigarette tax in Taiwan in terms of the effects it has on the overall economy and the health benefits that it brings.


METHODS
The multisector computable general equilibrium (CGE) model was used to simulate the impact of reduced cigarette consumption resulting from a new tax scheme on the entire economy gains and on health benefits.


RESULTS
The results predict that because of the new tax scheme, there should be a marked reduction in cigarette consumption but a notable increase in health benefits that include saving between 28,125 and 56,250 lives. This could save NTD 1.222 approximately 2.445 billion (where USD 1 = NTD 34.6) annually in life-threatening, cigarette-related health insurance expenses which exceeds the projected decrease of NTD 1.275 billion in Gross Domestic Product (GDP) because of reduced consumption and therefore tax revenue.


CONCLUSIONS
Overall, the increased cigarette excise tax will be beneficial in terms of both the health of the general public and the economy as a whole.
Ye
Chun-Yuan
CY
Department of International Trade, Overseas Chinese Institute of Technology, Taichung, Taiwan. iune@ocit.edu.tw
Lee
Jie-Min
JM
Chen
Sheng-Hong
SH
D000328:Adult; D017281:Cost of Illness; D003362:Cost-Benefit Analysis; D004526:Efficiency; D017048:Health Care Costs; D006801:Humans; D007349:Insurance, Health, Reimbursement; D008875:Middle Aged; D018803:Models, Economic; D016272:Occupational Health; D011634:Public Health / Q000191:economics / Q000639:trends*; D019057:Quality-Adjusted Life Years; D012907:Smoking / Q000009:adverse effects / Q000191:economics* / Q000453:epidemiology; D012946:Social Welfare / Q000191:economics / Q000639:trends*; D013624:Taiwan / Q000453:epidemiology; D013660:Taxes / Q000331:legislation & jurisprudence*; D019460:Tobacco Industry / Q000191:economics / Q000331:legislation & jurisprudence*