Issue link: https://read.dmtmag.com/i/1543154
18 tobaccoasia Issue 1, 2026 January / February By Timothy S. Donahue The first signs of a shift in global nicotine excise taxes didn't appear in parliaments or at industry trade forums, but instead on pricing boards outside small shops in cities like Nairobi, Jakarta, Dhaka, and London. It's the places where combustible cigarette prices increased, illicit alterna‑ tives surged, and governments imposed harsh fiscal measures to balance revenue, public health, and growing political pressure. In markets such as Africa and Southeast Asia, cigarette taxes are rising at the fastest pace in decades. In the UK and parts of Europe, policymakers believe that large tax hikes will speed up the shift toward a smoke‑free future. However, as governments adopt taxation measures more aggressively, an emerging uncomfortable truth is that tax policy is no longer guiding the market as effectively as it once did. In sub‑Saharan Africa, new research published in BMJ Tobacco Control shows that the tobacco industry is responding to tax hikes in unpredictable ways. In 12 African markets studied between 2016 and 2020, companies consistently "overshifted" taxes in countries such as Botswana, Madagascar, and Tanzania—raising retail prices by more than the tax increase—while "under‑ shifting" in places like Lesotho, South Africa, Nigeria, and Malawi. The strategy varied by year, brand identity, and manufacturer, indicating that tax increases are no longer consistently leading to higher consumer prices. The findings strike at the core of global tobacco control, which depends heavily on excise taxes to discourage smoking. They also raise concerns about the long‑term fiscal viability of tobacco taxes, especially as nicotine pouches, heated tobacco, and vaping products transform consumer behavior more rapidly than governments can adapt. The Shifting Economics of Nicotine Taxes Higher excise taxes pushed retail prices up across most markets, with Africa and Southeast Asia seeing the fastest tax increases in decades. Credit: Leon Brooks, Pixnio.