Montenegro study: taxes on tobacco and sugary drinks can save lives

A new WHO study on Montenegro has revealed that increased taxes applied to tobacco products and sugary drinks would have a significant positive impact in terms of avoiding premature mortality and new cases of disease over the next 20 years. If introduced as recommended by WHO, the taxes would also raise revenue and result in major monetary savings for the government in the form of reduced costs of treatment and workplace absenteeism. The results indicate that increased taxation applied to these products would be a powerful tool for Montenegro in achieving national and global targets related to reductions in overweight and obesity and tobacco smoking prevalence.

A microsimulation computer model was used to make the predictions. Using the best available data for Montenegro, it explored changes in obesity and smoking prevalence up to 2035, under several different policy scenarios. Based on the changes in the prevalence of obesity and smoking, the study team was able to estimate the number of new cases of disease that would be avoided under different tax policies. This then enabled researchers to calculate the potential benefits in terms of reduced health burden and direct health-care costs arising from obesity and smoking-related diseases. A full report on the study is due to be published this spring.

Taxes can improve health while producing economic gain

Measured against a baseline scenario of no change in current tax policies, fiscal reforms were shown to reduce tobacco consumption and risk factors for obesity, contributing to lives saved and disease prevented. The economic impact of reducing the smoking prevalence was also clear: if Montenegro was to reach the WHO target of a 30% decline in adult smoking by 2025, the monetary value of lives saved would be at least US$ 309.93 million, compared to a scenario with no change. The value of lives saved increases to over US$ 2.1 billion if additional excise taxes are introduced.

For obesity, the introduction of an additional 20% sugar-sweetened beverage tax in 2018 would reduce consumption of sugary drinks, positively influence rates of overweight and obesity, and reduce direct health-care costs. The monetary benefit in Montenegro would be in the range of US$ 250–271 million by 2035.