According to a new report from the International Monetary Fund (IMF), the US government will begin to phase out tobacco taxes by 2021, with the US tobacco industry expected to see a net loss of $5.3 billion per year.
The report, released in October, suggests that the tobacco industry will continue to face challenges as US tax revenue continues to fall and demand for its products is expected to increase.
However, the report warns that the tax is unlikely to be a permanent solution to the problem, noting that the US could be forced to reevaluate its tax policies, in the future.
According to the IMF, the US will likely end up with around $100 billion in lost revenue from tobacco tax revenue over the next 10 years.
The IMF notes that tobacco tax is a very important tool for the global tobacco control movement, and has called for the US to move away from taxing nicotine products.
“We need a global strategy to control tobacco use,” IMF Managing Director Jeffrey Sachs said in a statement.
“To achieve this, we need to tackle the root causes of tobacco consumption, like smoking and addiction, as well as reduce the negative impact of tobacco advertising and tobacco products on children’s health.”
In a statement, the tobacco companies said that they are disappointed that the report is suggesting that the world should continue to tax tobacco products, saying it is the wrong direction.
“The tax on nicotine is an important tool in the fight against smoking, but it is important to look beyond tobacco taxes to include other harmful and addictive substances,” said Philip Morris spokesperson Michael Ebersman.
“If we want to get nicotine products off the streets, we must look at more effective ways to get them off the shelves, including addressing the root cause of tobacco addiction.”
The IMF says that tobacco products are estimated to account for around 15% of global cigarette consumption, with tobacco-related illnesses being the second leading cause of preventable death in developed countries, behind heart disease.