The impact of a 2018 tax increase on illicit cigarette trade in Mongolia - baseline results
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National Cancer Council of Mongolia, Mongolia
University of Cape Town, South Africa
Publication date: 2018-03-01
Tob. Induc. Dis. 2018;16(Suppl 1):A128
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Background and challenges to implementation:
Mongolia battles with high smoking prevalence - 49% of adult male and 5.3% of adult female smoked in 2013. An evidence based tobacco tax policy could substantially reduce this prevalence. A study found that a 9-fold increase in tobacco tax could help Mongolia to reach its Sustainable Development Goals target of 30% prevalence reduction by 2025.
Despite a lot of opposition to a tobacco tax increase citing a possible increase in illicit trade, the government of Mongolia increased tobacco excise tax by 10% effective Jan 1, 2018. This tax increase is insufficient to have a meaningful impact on the prevalence.

Intervention or response:
We designed a study to measure the impact of the tax increase on any change in the size of illicit cigarette trade. It is based on collecting discarded cigarettes packs on the streets of Ulaanbaatar and another two provinces bordering Russia and China in three waves- April 2017, April 2018 and October 2018. We are recording the packs´ features, such as the presence of a Mongolian tax stamp, the correct graphic and text health warnings, and the presence of duty-free signs. This method will identify any changes in illegal tax evasion and legal tax avoidance, both representing tax losses for the governments.

Results and lessons learnt:
We have collected the total of 7000 discarded packs in April 2017. We will present the results of this first wave of data collection in terms of share of packs that did not pay taxes in Mongolia.

Conclusions and key recommendations:
We will also show the share of packs with special promotional features such as "Super Slim" or "Less Smoke Odour", and analyse the share of packs with different pictorial health warnings since the companies are aware that certain pictures are more unpleasant compared to others.

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