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Specific Duty per cigarette = 244.78 / 1000 = 0.24478 Specific Duty per pack = 0.24478 x 20 = 4.8956 Total Tobacco Duty : add the ad valorem duty and the specific duty to find the total tobacco duty: Total Tobacco Duty = 2.06 + 4.8956 = 6.9556 Calculation of Total Tax: To calculate the total tax on a pack of cigarettes, add the tobacco duty and the VAT amount (which is already included in the 15 price): VAT amount = 15 - 12.50 = 2.50 Total Tax = 6.9556 (Tobacco Duty) + 2.50 (VAT) = 9.4556 Percentage of Total Cost as Tax: To determine the percentage of the total cost attributed to taxes, divide the total tax by the total cost and multiply by 100: Tax Percentage = (9.4556 / 15) x 100 = 63.04% Cost of continued long term smoking Based on the previously calculated total tax of 9.4556 per pack of cigarettes, if a person smokes 2 packs per week, the weekly tax contribution would be: 9.4556/pack * 2 packs/week = 18.9112/week Annually, this equates to: 18.9112/week * 52 weeks/year = 983.3824/year Over 20 years, the total tax contribution *would be: 983.3824/year * 20 years = 19,667.648 [*Assuming price remains the same but it would probably go higher with inflation.] Cost per Year of Lost Life Expectancy : Total money paid to government: 19,667.648 Assumed loss of Life Expectancy: 10 years

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Learn more at FDAs The Relative Risks of Tobacco Products webpage