Analyzing The Impact Of Flat-Rate Duties On The Cigarette Consumption, Government Budget And Cigarette Smuggling In Asian Countries In 2020.Docx

Problem Statement According to the World Health Organization (2019), around 7.1 million people die from cigarettes worldwide annually, and among them, 900,000 people died from cigarettes smoke. Cigarettes with thousands of toxins have caused about 25 different diseases such as cancer, cardiovascular disease, respiratory disease, as well as affected reproductive health. According to the World Cancer Research Fund (2020), 85% of lung cancer cases are caused by smoking and smelling cigarettes smoke. Smoking is not only harmful to the health of smokers and those around them, but also causes great losses to the economy and society. To produce cigarettes, farmers have to spend a part of their production land to grow cigarettes ingredients. Cigarette smoking also pollutes the air, and the smoke released into the environment makes people around you sick by inhaling second-hand smokers. Cigarettes waste also adversely affects the living environment. Cigarettes is the leading cause of environmental pollution and long-term consequences. Therefore, cigarette is the cause of increasing costs of environmental protection services, overcoming air pollution and living environment. According to the World Health Organization (2020), cigarettes usage is also one of the causes of poverty, affecting the country’s sustainable development. In Vietnam, as stated in Ministry of Health’s annual report in 2020, annually, about 40,000 people die from cigarette-related diseases and 33 million non-smokers are affected by cigarettes smoke. Although the rates of smoking and secondhand smoking in Vietnam have decreased, the number of cigarette users in Vietnam is still in the list of top 15 countries with the number of cigarette users in the world. This report also stated that the rate of illness and premature death due to cigarettes use accounted for 12% of the total disease burden. Moreover, cigarettes use is also one of the causes of poverty, affecting the country’s sustainable development. The report shows that currently in Vietnam, the total cost of treatment and loss of work capacity due to illness and premature death due to cigarettes causes 5 groups of diseases (i.e., lung cancer, upper respiratory cancer, lung disease, myocardial infarction, stroke) is more than 23,000 billion VND per annum. Meanwhile, the survey conducted by Institute of Medical Genetics of Vietnam (2020) shows that each year more than 30,000 billion VND were “burned” to buy cigarettes. Recently, cigarette is a product to limit consumption because it causes a great harm to human health. In the world today, many Asian countries levy excise flat-rate duties on cigarette with a particularly high flat-rate duties rate in order to control consumption of this harmful product. Nguyen (2018) stated that income per person in Vietnam is increasing faster than that of cigarette prices so cigarettes are getting more affordable. Low cigarette prices are believed to lead to a high percentage of smokers in Vietnam, and as such Vietnam is in the process of considering the form of increasing the excise flat-rate duties on cigarettes. Given the above situation, this thesis, namely “Analyzing the impact of flat-rate duties on the cigarette consumption, government budget and cigarette smuggling in Asian countries in 2020”, was conducted. From observing the relationship between changes in flat-rate duties among Asian countries, the author would like to point out the impact of flat-rate duties on the cigarette consumption, government budget and cigarette smuggling in these countries. In addition, the thesis recommends the solutions for Vietnam government to cut down on the number of smokers and overcome remained consequences. 1.2 Objectives of study The general objective of the thesis is to determine the impact of flat-rate duties on the cigarette consumption, government budget and cigarette smuggling in Asian countries in 2020, and then propose the solutions for Vietnam government to cut down on the number of smokers and overcomes remained consequences. The specific objectives include: i. Figure out the impact of flat-rate duties on the cigarette consumption, government budget and cigarette smuggling in Asian countries. ii. Recommend the solutions for the Government of Vietnam to decrease the number of smokers and overcome remained consequences. 1.3 Research questions To obtain these two aforementioned specific research objectives, this thesis focuses on answering the following questions: 1) What is the impact of flat-rate duties on the cigarette consumption, government budget and cigarette smuggling in Asian countries? 2) What is the impact of flat-rate duties on government budget in Asian countries? 3) What is the impact of flat-rate duties on the cigarette smuggling in Asian countries? 1.4. Scope of the research The research is focus on analyzing the impact of flat-rate duties on the cigarette consumption, government budget and cigarette smuggling in Asian countries. According to WHO (2021), Some other countries in Asia, such as the Philippines, Cambodia, Laos, Malaysia and Thailand, have alarmingly high male smoking rates of over 40%. In Asian countries, more than 7 million people die each year from tobacco-related diseases, of which 600,000 die from passive exposure to tobacco smoke. Seven million deaths are a huge amount, but that number continues to rise. Every tobacco death is a preventable tragedy. Those deaths, and the suffering caused by tobacco-related diseases, have far-reaching effects on the health of individuals and their families, on the well-being of communities, and on the development of Countries. Efforts to promote ratification of the World Health Organization Framework Convention on Tobacco Control are facing obstacles in Southeast Asia. It is one of the regions with the highest number of smokers in the world, one of the reason is that in Asian countries, cigarette smuggling happens frequently. Hence, the data sets are cross-sectional, which were collected in 2020 for 48 Asian countries. 1.5. Structure of thesis The research consists of five chapters as followings: Chapter 1 explains reason the topic of thesis is chosen, significance of the thesis, main objectives, some major research questions and the scope of the research. Chapter 2 provides an overview on theoretical background of the impact of flat-rate duties on the cigarette consumption, government budget and cigarette smuggling. Chapter 3 highlights the research methodology. This chapter also describes the general econometrics model, variables and data and outlines the way to analyze data. Chapter 4 shows the statistical results from adopted models. Findings are analyzed and to make clear in reaching objectives and answering the questions in Chapter 1. Results of empirical studies by other researchers are also used to strongly support our findings. Chapter 5 resumes main findings and recommends useful policies for Vietnam in strategy of decreasing the number of smokers and overcoming remained consequences. This chapter also identifies the limitation and implications for further study.