Options for Tobacco Taxation in Afghanistan

Men are the primary consumers of tobacco products in Afghanistan: 48 percent of men from 15–49 years of age that have ever been married use tobacco, compared with 6 percent of women. Approximately 22 percent of adult men smoke cigarettes. An estimated 6.4 billion cigarettes are consumed domestically per year which will rise with the growth of the young urban population. Around 5 percent of the disability-adjusted life years lost in Afghanistan can be directly attributed to tobacco use. Gradually increasing cigarette import tax from 27.6 percent to 46.2 percent is estimated to generate an additional tax revenue of US$19.7 million in 2022, and a reduction of 5.1 percent in cigarette sales and 2.7 percent in the number of cigarette smokers. Illicit re-exportation is estimated to account for 24 percent of cigarettes imported into Afghanistan each year. While higher tax rates may disrupt this trade, modeling indicates that gradual tax rate changes will result in higher net revenues due to the size of the domestic market.