Prague - Billions of crowns vanish away every year in the fume of Czech cigarette smokers. The tobacco tax revenue does not cover the losses that the nicotine addicts cause.
In 2003 the Czech Republic earned 49 billion Czech crowns on smokers´habit but lost 64 billions in spending affiliated to smoking. In the end, the budget lost 15 billion crowns.
Those are the results of a new research published by Institute of Preventive Medicine from Brno's Masaryk University. About one third of all Czech adults are smokers and that at the time when the overall European consumption of cigarettes is on decline.
Five countries Finland, Iceland, Italy, Slovenia and Sweden even reported levels of tobacco consumption falling below 25% of the population aged 15 years and over based on the World Health Organization data. Today, 215 million of Europeans above the age of 15 are regular smokers: 130 million males and 85 million females.
Costs outweigh the benefits
The study about costs of smoking in the Czech Republic points out that the treatment costs are not the only ones to be deducted from the revenues of tobacco tax. What needs to be deducted as well are income taxes that the smokers would have paid if they had not died prematurely.
"Smokers represent about one third of Czech adult population. Based on the common knowledge, smoking causes about 25 diseases. About half of all smokers die on illnesses caused by their bad habit, half of them in the productive age. That means that they lose between 20 and 25 years of life," conclude the authors of the research Daniela Habrová ans Drahoslava Hrubá from Institute of Preventive Medicine at Masaryk University.
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The biggest chunk of budget income attributable to cigarette smokers is the value added tax and the consumption tax. In 2003 covered by the research the tax revenues surpassed 39 billion Czech crowns.
The other positive effect on the budget were the saved costs for retirement money that was not spent because its possible beneficiaries died prematurely. That makes up for nine billion crowns a year in budget savings.
On the other hand, the state pays every year 13.5 billion crowns in widow's pensions to people whose spouse died because of cigarette smoking. Further, disability pensions paid to ill cigarette smokers reached 5.3 billion crowns in 2003.
And there are even higher costs related to smoking - treatment of smokers costs 18 billion CZK and their sick leave pay amounts to 4.4 billion CZK. Besides, calculation show that the GDP in 2003 was 17 billion CZK lower due to the smokers' bad habit.
Solution: higher tobacco tax
The authors of the research suggest that the most effective solution causing the number of smokers to drop would be to increase cigarette taxes. "They change the habits of many people and make mainly young people stop smoking," Ms Habrová and Ms Hrubá say.
They believe that the taxes could be further increased since they do not reach the level of taxation recommended by the World Bank. Its recommendations suggest that the taxes reach between 66 and 80 per cent of the price of each cigarette pack.
