- 31
- May
- 2025
For decades, cigarettes were a real nicotine cash cow for governments. A thriving industry, lucrative taxes, countless jobs and mass consumption that, despite health warnings, was an integral part of the global economic and social landscape. But that was before public health got seriously involved.
On May 31st, we take a collective breath: it’s World No Tobacco Day. An annual opportunity for governments, NGOs and doctors worldwide to remind us that smoking kills – slowly but surely. While public health officials are rejoicing, economists are coughing a bit. Indeed, behind the global drop in tobacco consumption – accelerating over the past two decades – lies a paradox: fewer smokers means better health, but also less money in state coffers.
Today, amid anti-smoking campaigns, plain packaging, punitive taxes, increasingly restricted smoking zones (soon to be broom closets) and growing awareness of the dangers of smoking, tobacco consumption is collapsing. And with it, a significant portion of public revenue once fueled by this formerly profitable smoke.
A World that Smokes Less and Less
According to the World Health Organization (WHO), global tobacco consumption has dropped by over 20% in two decades. In 2000, about 1.4 billion people smoked; by 2024, that number had dropped to around 1.1 billion and continues to fall. In Europe, the decline is marked, especially in Western Europe. France, for instance, saw smoking rates drop from 30% to about 24% in ten years. The United States reduced its smoking rate from 42% (in 1965) to about 12% today. Asia – the most populous and historically the most tobacco-consuming continent – has seen a slow but steady decline. In Africa, the drop is more modest, but dynamic thanks to emerging preventive policies.
In Lebanon, once a major lover of cigarettes, the decline remains modest. It is estimated that nearly 42% of adults still smoke. The trend is downward, but moderate due to lax regulations and a strong culture of social smoking.
But at What Cost to the Economy?
Yes, fewer smokers also means fewer tax revenues. Tobacco was a major source of income for many governments, especially through excise taxes (specific taxes on tobacco products). According to combined sources, in France, tobacco taxes brought in over €14 billion per year a decade ago. That number has dropped with decreasing consumption. In the US, federal and state revenues from tobacco went from $25 billion to about $18 billion.
In Lebanon, the tobacco sector remains one of the few that generate stable income. However, the drop in consumption could erode this source in the future.
The Last Nail in the Pack: France (Almost) Bans Outdoor Smoking
Indeed, starting July 1st, smoking will be banned in parks, beaches, stadiums, bus shelters, sports fields, and especially around schools and educational institutions. The stated goal is to protect children. Health Minister Catherine Vautrin wants to blow a breath of clean air into young lungs. The fine for violators? €135. Enough to make you think twice before lighting up between two swings.
In short, fewer smokers means better public health – but also less public revenue. A dilemma? Not necessarily. Economies can reinvent themselves in ways that don’t rely on a cloud of nicotine. Health, innovation, sustainable industries… There are other ways to generate revenue than selling diseases wrapped in paper.
But one thing is certain: the cigarette, once a discreet engine of the global economy, is now on the path to legislative extinction. And that might be a good thing – except for public finances, which may take one last nostalgic drag. The economic future will be smoke-free and scam-free.
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