Conference Paper
From Taxes to Transformation: Impact of Tax Increases on Smoking Behavior in Turkey
No.
ERF32AC_60
Publisher
ERF
Date
May, 2026
Topic
L. Industrial Organization
Tobacco use remains a formidable global public health concern, exerting significant adverse effects on individual health, healthcare systems, and society at large. Although diverse strategies have been employed to mitigate tobacco consumption, taxation has emerged as a potent policy instrument for discouraging smoking and promoting public health. Nevertheless, the precise magnitude of the influence of tax increases on tobacco consumption patterns remains inadequately understood, creating a critical knowledge gap that necessitates urgent attention. In line with other nations, taxes on tobacco products in Turkey constitute one of the foremost tools in combatting tobacco use. Prior to 2002, taxes levied on cigarettes, the most prevalent tobacco product in Turkey, encompassed several components such as value-added tax, defense industry fund, education fund, and additional taxes. However, in 2002, these taxes were consolidated into a singular levy known as the "Special Consumption Tax." Notably, between 1970 and 2001, tax rates fluctuated between 33.33% and 60.47% of the selling prices. Subsequently, tax rates experienced gradual increments, ultimately the tax rate is reaching over 81.40 % of the selling price in 2022. Consequently, the objective of the present study is to scrutinize the effects of average tax rates individuals have been subjected to on their smoking behavior and smoking cessation endeavors. Two primary sources of data are employed for analysis. First, the study utilized the 2010, 2012, 2014, 2016, 2019 and 2022 rounds of the Turkish Health Surveys, which provide valuable information on individuals' smoking behavior and demographic characteristics. These surveys are very broad, including age of starting smoking for current and former smokers and quitting age for quitters. Second, data on tax rates for tobacco products were obtained from the Turkish Revenue Administration and Ministry of Treasury and Finance. The study utilized a difference-in-differences approach to exploit the variation in taxation rates experienced by individuals across different cohorts. Specifically, the average tax rate on tobacco products during individuals' youth period (age 14-17) and adulthood (age 18 and onwards) were examined to assess the impact of tax rates on smoking behavior. Control and treatment groups were formed by defining birth cohorts based on the tax exposure years. For example, those affected by the low tax rate and were in the 14-17 age group before 2002 was used as a control group. After 2002, those aged 14–17 who were affected by the high tax rate were used as the treatment group. The impact of exposure to high tax rate during the adulthood for women on daily smoking and occasionally smoking is higher than the impact of exposure to high tax rate during adulthood for men on daily smoking and occasionally smoking. The study also shows that the effect of the average tax rate faced during youth (ages 14 – 17) is also statistically significant for both women and men and reduces the likelihood of tobacco product use daily or occasionally. Considering this outcome, this study provides insights into the optimal tax rates and structures for achieving the desired reductions in tobacco consumption, it can aid policymakers in designing tax policies that strike a balance between discouraging smoking and minimizing potential negative economic consequences, such as illicit trade or significant disruptions in the tobacco market. Moreover, by examining the effects of tax increases on different population groups, the study sheds light on potential disparities in smoking behavior and cessation efforts. Policymakers can utilize these findings to develop targeted interventions and support mechanisms that cater to vulnerable populations, ensuring that the burden of tobacco-related health risks is mitigated equitably. Ultimately, the policy implications of this study aim to guide evidence-based decision-making and assist policymakers in formulating comprehensive tobacco control strategies that leverage the power of taxation to reduce tobacco consumption and improve public health outcomes in Turkey.
Research Fellows
Asena Caner
Professor of Economics, TOBB-University of Economics and...
Research Fellows
Belgi Turan
Associate Professor and Deputy Chair of the...
Authors
Yenal Can Yiğit
Manager, Financial Affairs Directorate, TOBB University of...