The report "Economics of Tobacco and Tobacco Taxation. National Study - Bulgaria" approaches tobacco economics and tobacco taxation in Bulgaria from the standpoint of tobacco control. It follows the tobacco products supply chain and confirms that it currently contributes only marginally to domestic employment and production yet provokes a heavy outflow of household income abroad. The national tobacco products demand is also distorted against the background of a mass culture that normalizes smoking. As regards the taxation of tobacco products this report shows that the Bulgarian governments, by keeping the excise duty mostly flat since 2011 have contributed (along with the growing incomes) to raising the national per capita cigarette consumption by 43% in a decade.

An econometric macro model proves that an introduction of higher excise duty on tobacco products in Bulgaria might increase the government revenues while substantially decreasing the number of cigarettes consumed. The calculated price elasticity of demand for cigarettes in Bulgaria falls in the range minus 0.71–0.795. This means that a hypothetical increase in the excise tax on cigarettes by 20%, leading to a 13.82% increase in their sales price, other things being equal, in the long term would result in higher public revenues by BGN 126 million per year, while cigarettes consumed would decrease with over 83 million packs. 

This is clearly a win-win scenario but only if the public interest serves as an overarching principle in the government decisions concerning public health and public revenues.

Authors of the report are: Dimitar Sabev, Ph.D., Economic Research Institute at the Bulgarian Academy of Sciences; Emilia Nasseva, Ph.D., Medical University – Sofia; Pavel Antonov, Ph.D., BlueLink Foundation; Dr. Masha Gavrailova, MD, Smoke Free Bulgaria Association; Dr. Gergana Geshanova, MD, Smoke Free Life Coalition. 

A short version of the text can be found here.

Based on analysis of publicly available information, interviews with participants, and other sources, the authors establish and describe a mechanism of conveying messages and interests of tobacco industry to decision makers in Bulgaria, which distorts health policies in its favor. Annually the tobacco industry kills nearly 8 million people world over through chronic non-communicable diseases directly or indirectly caused by the use of its products. Governments’ determination to limit and eliminate tobacco use is irreversible since the entry into force of the WHO’s Framework Convention on Tobacco Control (FCTC) ratified by Bulgaria in 2005.

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