Gains from the Increase in Tobacco Excise Taxes in BiH

This Policy Brief was written by University of Banja Luka in Bosnia and Herzegovina. The policy brief simulated the impact of the planned cigarette tax increases from BAM 3.46 at the baseline in 2024 to BAM 5.00 in 2025, and followed by annual increases of BAM 1.00 in 2026 and 2027. The researchers also consider the share of illicit trade in their analysis based on a 2025 household survey, which amounts to 7.3%. The findings suggest that the tax increases would raise prices between 15% and 17% annually from 2025 to 2027. As a result, adult smoking prevalence would decrease from 41.1% to 37.5% in 2025; and the quantity of packs sold would decrease by 5.08%, 2.84%, and 1.95% in 2025, 2026, and 2027, respectively. This would prevent between 9,200 and 18,165 premature deaths. The simulation also considered the impact on youth. These cigarette price increases would deter between 3,185 and 3,217 adolescents from smoking, saving between 1,274 and 1,286 youth lives, depending on the price increase applied. On the other hand, total tax revenue would increase by 11.96% in 2025, 16.11% in 2026, and 14.06% in 2027. The policy brief concludes with recommendations for decision makers to continue to increase and update tobacco taxes to reduce consumption and raise additional tax revenues, along with broad efforts to strengthen non-price tobacco control policies.