Cigarette Taxation in Chile: A Proposal

Abstract

In Chile, as in many countries, cigarettes are among the goods most highly taxed, which affects competition in the industry, tax revenue, consumption and health effects related to its consumption. These effects depend not only on the level of taxation but
also on its structure. In this study, I analyze the effects of the type of taxation used in Chile to tax cigarettes and propose an alternative that is more efficient than the one currently used.