Governments around the world face a complex challenge: how to reduce smoking-related diseases while managing the regulation and taxation of nicotine products. A new briefing from the Global State of Tobacco Harm Reduction (GSTHR) makes a compelling case for how tax policy can support—not hinder—public health goals.
Why Taxation Strategy Matters
Historically, tobacco taxation has been an effective tool for reducing smoking rates. However, as safer nicotine products (SNPs) such as nicotine pouches, vaping devices, and heated tobacco products have become more prevalent, many governments have applied the same tax models to these products as they have to combustible cigarettes.
This approach, experts warn, may be misguided.
When governments apply high taxes across the board, they risk blurring the critical distinction between high-risk products (like cigarettes) and lower-risk alternatives. This undermines the harm reduction potential of SNPs and may discourage smokers from switching to safer options.
Proportionate Taxation for Risk-Based Regulation
The GSTHR briefing emphasizes a clear principle: taxation should be proportionate to risk. This means that the most harmful products—combustible tobacco—should face the highest rates of taxation. Meanwhile, lower-risk alternatives should be taxed at significantly lower rates, or in some cases, be exempt from excise taxes altogether.
Doing so not only reflects scientific evidence but also aligns with public health goals by creating financial incentives for smokers to transition to less harmful products.
Lessons from Global Markets
Countries that have implemented proportionate taxation—such as the UK and New Zealand—are seeing more smokers switch to SNPs. In contrast, countries that over-tax these alternatives may unintentionally keep smokers tied to combustible tobacco.
The briefing highlights that poorly designed tax regimes can:
- Delay smokers from switching to safer alternatives
- Create a black market for SNPs
- Reduce consumer trust in public health messaging
- Limit product innovation and availability
Recommendations for Policymakers
To support effective harm reduction and improve population health, GSTHR recommends that governments:
- Base taxation on product risk—using independent scientific reviews as guidance.
- Create a clear distinction in tax rates between combustible tobacco and safer nicotine products.
- Avoid “sin taxes” that treat all nicotine consumption equally, regardless of health impact.
- Consider tax incentives to promote switching among adult smokers.
- Monitor and adapt policies as new products and evidence emerge.
The Bottom Line
Taxation isn’t just about revenue—it’s a powerful policy lever that can drive better public health outcomes when aligned with science and harm reduction principles.
For safer nicotine products, this means creating tax structures that reflect their lower risk and encourage switching from combustible tobacco. As GSTHR’s briefing makes clear, smarter tax policies can save lives by accelerating the transition to reduced-risk products.
📘 Read the full GSTHR briefing: Safer Nicotine Product Taxation and Optimal Strategies for Public Health
