According to the laws of each country, tobacco products vary in price. See how cigarettes have been taxed in the countries of the region
The price of a pack of cigarettes throughout Latin America is actually very low, when compared to prices in other regions of the world. However, between country and country the amount that consumers pay for the same product varies a lot. This is mainly due to taxes on consumption, which governments advance to raise funds and discourage smoking.
Colombia, for example, which had one of the cheapest cigarette packs in the region of $ 1.38 for a package of 20 Marlboro cigarettes, introduced in 2016 as part of its tax reform a radical change to how products would be taxed tobacco derivatives.
This country imposed a tax of around 25 cents per pack, which has been increased every year until it added almost 75 cents to each pack, leaving the final price of a package of Marlboro at $ 2.07 dollars.
This price, which is still below the Latin American average of $ 3.21, and the tax burden of 58%, is also below the regional average of 67%.
Similarly, Peru increased this month the selective tax on cigarette consumption. Now it is about 8 cents per unit, an increase of 44% compared to the previous figure.
After the application of this tax the package of Marlboro cigarettes in Peru, that was around $ 3.09 dollars, went to cost $ 3.81.
The situation in these two countries, which introduced moderate measures and increased the tax progressively, varies greatly from that of Chile that has the most expensive cigarette package in Latin America at $ 5.50 dollars.
The government of Chile, which introduced in 2013 a so-called 'Anti-Tobacco Law' to restrict the sale and consumption of cigarettes, now has a 75% tax on traditional cigarettes. Given the difficulties that this can represent for the tobacco companies, some such as Philip Morris International have expressed interest in abandoning their operations within this country.
Other countries like Mexico seek to follow Chile's path and discourage the consumption of tobacco by means of strong tax rates. The Mexican government is taxing cigarettes with tariffs that add up to 63% of the final price of a pack, including a 16% VAT that is included in almost all products. Adding all this, the final price of a pack of Marlboro cigarettes ends up being $ 2.51, almost half of what they cost on the other side of the border, in the United States, where the average price is $ 5.51.
In response to these increasingly popular taxes that have shown some effectiveness, reducing cigarette consumption by 4.6% in Colombia, for example, tobacco companies resorted to commercializing their products in unconventional ways in order to avoid the tax burden .
The most notorious effort is the one by Philip Morris, a company that with its Heets product seeks to take its business towards the consumption of tobacco with low risk for the consumer. This presentation of a cigarette that prevents the combustion of tobacco and is limited to heating it, thus producing less harmful substances, entered in the region last year through the Colombian market. However, the product was also taxed and included in the same regime that covers traditional cigarettes.
Latin American Post | Pedro Bernal
Translated from "Conozca cuánto cuesta el mismo paquete de cigarrillos a través de Latinoamérica"