Tobacco Tax Modeling: Evidence from North Macedonia (2023)
Tobacco smoking prevalence in North Macedonia is among the highest in Southeastern Europe, reaching 48.4 percent in 2019. This is well above the global average of 22.3 percent. North Macedonia also has the region’s lowest cigarette prices, reflecting the country’s low tax burden. The current specific excise tax level of EUR 54 per 1,000 cigarettes is low by European standards. As the country is in the process of European Union (EU) integration, the tobacco excise level needs to increase by 67 percent to reach the EU-required minimum of EUR 90 per 1,000 cigarettes. Considering this dynamic, the detrimental health effects of tobacco use, and the fact that tobacco excise taxes are widely proven to be the most effective measure to drive down tobacco consumption, there is significant room for a more aggressive tobacco taxation policy with substantial increases in the excise tax.
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