CONFERENCE PROCEEDING
Economic consequences of higher taxes on tobacco in Denmark
1
Cancer Prevention and Information, Danish Cancer Society, Copenhagen, Denmark
Tob. Prev. Cessation 2026;12(Supplement 1):A143
ABSTRACT
BACKGROUND-AIM:
In 2020 and 2022 tobacco taxes were raised in Denmark and the average price for a pack of 20 cigarettes is now 8.50 €. In 2019, before the taxes were raised, the smoking prevalence was 20 % (aged 15 and over) and in 2024 the smoking prevalence was decreased to 17 %. The domestic sales fell in the same period from 5.6 bn to 3.5 bn but the cross-border sales have doubled to 1 bn. The Danish Ministry of Taxes has calculated a loss in revenue of 0.7 bn € it taxes were raised so the average in Denmark became 13.5 € (~100 DKK).
METHODS:
The agency Kraka Economics made a literature study for all relevant parameters and used standard economic methods to recalculate the revenue at an average price of cigarettes 13.5 € (~100 DKK). They estimated the price elasticity in Denmark to -0.4 and instead of a linear correlation between price and cross-border sales they used elasticity. They also took the pandemic in 2020-2021 into account because it changed the pattern of traveling for some time. Kraka Economics calculated the cross-border trade of cigarettes in a variety of ways: Based on the differences in tobacco tax between Danmark and the European countries, differences in weighted average price (WAP) and measurements for the year 2022 compared to the period 2019 – 2022. Finally, Kraka Economics calculated the loss in revenue based on results from Norway which have high prices on cigarettes compared to the rest of Europe.
RESULTS:
The preferred model of Kraka Economics showed a loss in revenue in Denmark of ~0.1 bn € which was presented in a report. The result gave a lot of media attention og reactions from Danish politicians. In general, politicians must present ways for financing for all political proposals and suddenly it seemed much more likely to find the money and save lives. Politicians from the opposition called the report a game-changer and said financing would now become much easier. However, the Danish Ministry of Taxes didn’t change their opinion and said they precisely predicted what happened in 2020 and 2022.
CONCLUSIONS:
The report and calculation of Kraka Economics moved tobacco taxes up the political agenda in Denmark for a while and hopefully laid the ground for higher tobacco taxes in Denmark. Several politicians said they would like to raise tobacco taxes a lot if they could find the chance.
In 2020 and 2022 tobacco taxes were raised in Denmark and the average price for a pack of 20 cigarettes is now 8.50 €. In 2019, before the taxes were raised, the smoking prevalence was 20 % (aged 15 and over) and in 2024 the smoking prevalence was decreased to 17 %. The domestic sales fell in the same period from 5.6 bn to 3.5 bn but the cross-border sales have doubled to 1 bn. The Danish Ministry of Taxes has calculated a loss in revenue of 0.7 bn € it taxes were raised so the average in Denmark became 13.5 € (~100 DKK).
METHODS:
The agency Kraka Economics made a literature study for all relevant parameters and used standard economic methods to recalculate the revenue at an average price of cigarettes 13.5 € (~100 DKK). They estimated the price elasticity in Denmark to -0.4 and instead of a linear correlation between price and cross-border sales they used elasticity. They also took the pandemic in 2020-2021 into account because it changed the pattern of traveling for some time. Kraka Economics calculated the cross-border trade of cigarettes in a variety of ways: Based on the differences in tobacco tax between Danmark and the European countries, differences in weighted average price (WAP) and measurements for the year 2022 compared to the period 2019 – 2022. Finally, Kraka Economics calculated the loss in revenue based on results from Norway which have high prices on cigarettes compared to the rest of Europe.
RESULTS:
The preferred model of Kraka Economics showed a loss in revenue in Denmark of ~0.1 bn € which was presented in a report. The result gave a lot of media attention og reactions from Danish politicians. In general, politicians must present ways for financing for all political proposals and suddenly it seemed much more likely to find the money and save lives. Politicians from the opposition called the report a game-changer and said financing would now become much easier. However, the Danish Ministry of Taxes didn’t change their opinion and said they precisely predicted what happened in 2020 and 2022.
CONCLUSIONS:
The report and calculation of Kraka Economics moved tobacco taxes up the political agenda in Denmark for a while and hopefully laid the ground for higher tobacco taxes in Denmark. Several politicians said they would like to raise tobacco taxes a lot if they could find the chance.
| eISSN: | 2459-3087 |
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