CRES launches SimTax tool to model tobacco taxation in Senegal

The Centre de recherche en économie appliquée (CRES) has launched SimTax, an innovative fiscal simulation tool designed to evaluate the impact of tobacco taxation on consumption, public health, and state revenue in Senegal.

Presented in Dakar during a workshop organized by Forum civil in partnership with Tax Justice Network Africa, the tool allows policymakers to model various fiscal scenarios. The primary objective is to provide objective data to support more effective taxation aimed at reducing smoking prevalence and increasing public funds.

The SimTax model has identified four reform scenarios to be implemented through 2036, all aiming to gradually increase the tax share of cigarette retail prices to 70%, aligning with World Health Organization (WHO) recommendations. These scenarios include maintaining the current system, increasing ad valorem excise, combining ad valorem and specific taxes, or increasing only specific taxes.

Projections indicate that increasing the ad valorem rate (SIM2) could yield the highest tax revenue, estimated at 72.93 billion CFA francs, while also providing the strongest reduction in smoking prevalence. A mixed system (SIM3) is projected to mobilize 56.64 billion CFA francs.