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Transnational tobacco company influence on tax policy during privatization of a state monopoly: British American Tobacco and Uzbekistan

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  • Gilmore, A.
  • Collin, J.
  • Townsend, J.
  • Gohil, E.

Abstract

Objectives. The International Monetary Fund encourages privatization of state-owned tobacco industries. Privatization tends to lower cigarette prices, which encourages consumption. This could be countered with effective tax policies. We explored how investment by British American Tobacco (BAT) influenced tax policy in Uzbekistan during privatization there. Methods. We obtained internal documents from BAT and analyzed them using a hermeneutic process to create a chronology of events. Results. BAT thoroughly redesigned the tobacco taxation system in Uzbekistan. It secured (1) a reduction of approximately 50% in the excise tax on cigarettes, (2) an excise system to benefit its brands and disadvantage those of its competitors (particularly Philip Morris), and (3) a tax stamp system from which it hoped to be exempted, because this would likely facilitate its established practice of cigarette smuggling and further its competitive advantage.. Conclusions. Privatization can endanger effective tobacco excise policies. The International Monetary Fund should review its approach to privatization and differentiate the privatization of an industry whose product kills from privatization of other industries.

Suggested Citation

  • Gilmore, A. & Collin, J. & Townsend, J. & Gohil, E., 2007. "Transnational tobacco company influence on tax policy during privatization of a state monopoly: British American Tobacco and Uzbekistan," American Journal of Public Health, American Public Health Association, vol. 97(11), pages 2001-2009.
    • Handle: RePEc:aph:ajpbhl:10.2105/ajph.2005.078378_1
    DOI: 10.2105/AJPH.2005.078378
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    Cited by:

    1. Hiilamo, Heikki & Glantz, Stanton A., 2015. "Implementation of effective cigarette health warning labels among low and middle income countries: State capacity, path-dependency and tobacco industry activity," Social Science & Medicine, Elsevier, vol. 124(C), pages 241-245.
    2. Xinyu Hou & Puyang Sun, 2023. "The impact of dismantling state monopoly on market integration: Evidence from the edible salt reform in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(3), pages 589-609, July.
    3. Libman, Alexander, 2008. "Government-business relations in post-Soviet space: The case of Central Asia," MPRA Paper 11874, University Library of Munich, Germany.

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