Tobacco Use and Tobacco Taxation in El Salvador

El Salvador became a Party to the WHO Framework Convention on Tobacco Control on October 19, 2014. On 23 June 2011, the Congress of El Salvador passed a national tobacco control law that included 100 percent smoke-free policies. On 18 July, almost a month after the approval, President of the country (in 2009-2014) Mauricio Funes vetoed the law. As part of his arguments to support the veto the president repeated well-established tobacco industry claims in the media that "individual freedom is diminished, (the law) also harms economic freedom of the stakeholders that participate in the market, negatively affecting not just the tobacco industry". Tobacco control advocates with support from international organizations successfully pressured the legislators to overturn the veto, which the Congress of El Salvador did on 23 July. However, the President refused to issue the regulations of the law and then introduced an amendment in Congress. Surprisingly, on November 17, the same legislators that had overridden the veto to keep the 100 percent smoke-free law, changed their position and approved the amendment, a huge success for the tobacco industry. In December 2009, El Salvador substantially increased specific cigarette excise rate and this caused a 25 percent decrease in tobacco consumption and 30 percent increase in tobacco excise revenue in 2010-2011. In 2012-2016, tobacco excise rates were not changed, while tobacco industry annually increased the net-of-tax cigarette price well above the inflation rate and above the population income growth. Such price policy reduced tobacco affordability and cigarette consumption continued to decline. The impact of affordability reduction was reinforced by smoke-free and other effective tobacco control policies. The decline in tobacco consumption under constant tobacco excise rates caused a reduction in the governmental tobacco excise revenues. There were no factors which could substantially increase cigarette smuggling into El Salvador in recent years and the observed decline in cigarette sales is caused by the reduction of cigarette consumption in the country.