Comparing taxes on alcoholic beverages in the Region of the Americas

Abstract

Background and Aims: Excise taxes represent one of the most cost-effective policies toreduce the harmful use of alcohol. Existing information about their design is limited andno standardized metric has been used to compare tax levels in the Region of the Ameri-cas. This study aimed to compare alcohol excise tax policies throughout the Americas,compare tax levels and consider opportunities to improve the impact of excise taxes onalcohol consumption and health.

Design and Setting: Descriptive analysis using a method developed by the Pan AmericanHealth Organization and adapted from the World Health Organization’s tobacco taxmonitoring. Data were collected by surveying ministries of finance and reviewing tax leg-islation in effect as of November 2020 in the Region of the Americas.

Measurements: Tax policy design indicators, taxes as a percentage of the retail price ofthe most-sold brand of beer, wine and spirits, including a weighted average indicatoracross beverage types, and tax levels per standard drink (10 g ethanol) in internationaldollars at purchasing power parity.Findings:Thirty-three countries in the Americas (94%) apply excise taxes on alcoholicbeverages, with Argentina and Uruguay not applying them to wine. There is significantheterogeneity in excise tax design across countries and beverage types. Only a third ofamount-specific excise taxes are regularly adjusted to avoid erosion. Regional medianexcise taxes represent the highest share of the price for spirits (21.4%) and the lowestfor wine (11.0%). The regional median consumption-weighted average excise tax shareacross all beverage types is 12.0%. Excise tax shares are generally higher in Latin Amer-ica than in the Caribbean and Canada. Excise tax levels per standard drink are generallylower for spirits than for other beverages.

Conclusions: Alcohol excise tax policies vary significantly across the Americas, oftenreflecting national consumption patterns. To maximize their public health impact, taxrates could be increased and tax designs improved, particularly to ensure higher tax bur-dens on high-strength drinks