Enhancing Public Health and Fiscal Stability in North Macedonia Through Tobacco Taxation: Tobacco Tax Modeling from North Macedonia

This Policy Brief was written by Analytica from North Macedonia. The policy brief assesses the impact of accelerating tobacco tax increases from 2024 to 2026 relative to the current excise calendar. Specifically, the researchers consider the effect of increasing excise taxes by 16% annually. This would increase cigarette prices by 12.88% and 13.15% in 2025 and 2026, respectively. As a result, tax revenues would rise from EUR 244,729,628 in 2024 to EUR 304,306,236 by 2026 with a consistent year-on-year growth of around 11.5%. Cigarette consumption, meanwhile, would decrease by 3.16% from 2024 to 2025, and 3.32% from 2025 to 2026. Similarly, smoking prevalence would decrease from 48.40% in 2024 to 47.28% in 2026. The findings suggest that the public health benefits of this reduction would accumulate over time, as 2,333 smokers would avoid premature death in 2025 and 2,462 smokers would avoid premature death in 2026. The policy brief concludes with recommendations for policy makers to boost excise taxes to reap the fiscal and public health benefits, in addition to supporting North Macedonia's EU integration.