Commentaries on Sornpaisarn et al. (2012)
AN ALTERNATIVE TAXATION METHOD FOR LOW- TO MIDDLE-INCOME COUNTRIES
Article first published online: 10 JUL 2012
© 2012 The Authors, Addiction © 2012 Society for the Study of Addiction
Volume 107, Issue 8, pages 1386–1387, August 2012
How to Cite
MEDINA-MORA, M. E. (2012), AN ALTERNATIVE TAXATION METHOD FOR LOW- TO MIDDLE-INCOME COUNTRIES. Addiction, 107: 1386–1387. doi: 10.1111/j.1360-0443.2012.03810.x
- Issue published online: 10 JUL 2012
- Article first published online: 10 JUL 2012
- LMIC countries;
- unrecorded alcohol
Sornpaisarn and colleagues  analyse the impact of two taxation schemes and propose a combination of both: (1) a tax estimated as a function of alcohol content, which discourages harmful patterns by promoting inexpensive low-alcohol-content beverages, appropriate for countries with a high prevalence of current drinkers but that has the potential of also promoting drinking initiation when high levels of abstention coexist; and (2) a tax calculated as a function of price that puts higher tax on both beverages preferred by heavy drinkers and those preferred by potential alcohol consumption neophytes. This combined system of taxation meets two prevention objectives: the reduction of consumption and harm on drinkers and the prevention of initiation of drinking maintaining high rates of abstention. According to the authors, this combination has led to lower overall consumption in Thailand.
The available evidence  states that increasing alcohol prices through taxes is one of the most effective strategies for reducing consumption of alcohol at the population level, including problem drinkers and youth. However, according to Room , such steps can be effective only if the illegal alcohol market is under control.
Following this evidence, the first query that arises concerning the benefit of this scheme is what impact it might have in low- to middle-income countries (LMIC) that share with Thailand high rates of abstention, but where rates of unrecorded alcohol are also high; or is the potential modification of the per capita rising rates of adolescent drinking and of harmful drinking greater than the burden derived from an increase in unregulated alcohol?
The authors state that maintaining abstention is not a goal for high-income countries consistent with its low prevalence (i.e. only 12% of males and 24% of females abstain from alcohol in the highest-income countries in Europe); but abstention rates are high in less developed countries, reaching 93% of the population in eastern Mediterranean countries (EMR), 80% in South East Asia (SEAR)  and between 20 and 57% among males and 45 and 89% among females in non-wine-producing countries in Latin America .
Deterrence of harm is also important for LMIC where drinking is less common than in high-income countries (with 2.97 and 4.41 litres of pure alcohol in LMIC compared to 9.46 and 10.55 litres in upper-middle- and high-income countries). None the less, the harm associated with each litre consumed per capita is much greater in LMIC countries due to the more harmful way in which alcohol is consumed. For example, deaths by each litre consumed can range from 1.92 and 1.80 in the poorest countries in SEAR and AFR to 0.08 in the highest-income countries in Europe .
Females and adolescents are more often abstainers, and thus the focus of the alcohol industry to enlarge their markets, but at the same time devise a different way of setting taxes, can counteract this trend. Current drinking males outnumber females in a proportion of four to one in all regions, and in 71% of countries alcohol use is increasing among adolescents and young adults .
An additional benefit is the increase in taxes for beer, a beverage consumed by adolescents in many countries and is an initiation beverage, often omitted from regulations; for example, the World Health Organization (WHO) reports from a survey on member states that only 15.3% of reporting countries stated that they had implemented regulations in density for on-premise consumption for beer, compared to 36% for wine or spirits .
The limitation of the recommended taxation approach is unrecorded alcohol, which represents 28% of world alcohol consumption but can be as high as 69% in SEAR or 56% in EMR of the total per capita in litres of pure alcohol ; thus, a potential increase in its proportion would be an undesired consequence of increased taxes.
As the authors establish, more research is needed; it would be very useful to add into the model the impact of unregulated alcohol to assess the benefits against the costs of the combined method. A shift in conceptualizing taxes as from being a source of revenue to one aimed at reducing the burden on health, avoiding relying on taxation as a unique measure, controlling unregulated alcohol and promoting international collaboration to prevent the importation or smuggling of lower-priced beverages, are much-needed measures.
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