Palau Tobacco Excise Tax 2013: An Evaluation of Tobacco Use, Imports, and Expenditures

Tobacco use is a public health concern in the Republic of Palau, where cigarette smoking and betel nut chewing with tobacco are highly prevalent. In 2013, Palau enacted the Fiscal Year 2014 Budget Act with Section 26 that established an excise tax on tobacco products beginning in 2014. This study assessed the impact of the tobacco tax on adult and youth tobacco use prevalence, tobacco importation, and household tobacco expenditure between 2010 and 2024. Data were extracted from 3 adult population-based surveys (2011, 2016, 2023), 3 youth census surveys (2013, 2017, 2022), annual tobacco imports data (2010-2024), and 2 Household Income and Expenditure Surveys (2013, 2024). Among youth, there was a significant decline between 2013 to 2022 in the prevalence of betel nut chewing with tobacco by 69.5% (36.4% to 11.1% [P<.001]), cigarette smoking by 51.6% (35.3% to 16.9% [P<.001]), and any tobacco use by 51.6% (54.8% to 26.5% [P<.001]). Among adults, there was a significant decline between 2011 to 2023 in cigarette smoking by 36.4% (36.0% to 22.9% [P<.001]) and betel nut chewing with tobacco by 11.9% (49.6% to 43.7% [P<.001]), but the overall prevalence of any tobacco use remained stable. Annual tobacco imports decreased significantly by 28.6% from 2010 to 2024, however, average household tobacco expenditure increased from 2.4% to 3.1% of total household spending from 2013 to 2024. Despite the excise tax, tobacco use in Palau remains high, highlighting the necessity for sustained policy interventions, including periodic tax increase with adjustment for inflation and the expansion of evidence-based cessation programs.