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This fiscal strategy is rooted in “active awareness” of the external costs associated with tobacco use. Government officials argue that the high taxes are necessary to offset the massive expenditures the state incurs through the public healthcare system, specifically in treating long-term respiratory illnesses, cardiovascular diseases, and various forms of cancer. By making the habit increasingly expensive, the government creates an “absolute” economic deterrent, particularly for younger demographics who are more sensitive to price fluctuations. Data suggests that each significant price hike is followed by a measurable dip in sales, reinforcing the administration’s belief that the wallet is the most effective gateway to behavioral change.
