Tobacco and tobacco products have long been taxed, primarily because the relatively inelastic demand for these products make them an easy source of revenue. In recent decades, however, taxation has been applied to cigarettes and other tobacco products in order to promote health as well as raising revenue. Cigarettes and other tobacco products are taxed in a variety of ways.
The most commonly used methods of taxation include specific taxes, value added and other ad valorem taxes, and import duties. Specific taxes (or excise taxes) add a fixed amount to the price of cigarettes while ad valorem taxes are a percentage of the base prices. Cigarette taxes in some countries such as the United States have been imposed by various levels of government, national, state and local level. Governments in nearly every country impose taxes on cigarettes and other tobacco products.

The levels of taxes imposed on cigarettes vary from county to county. In the high income countries, tax amounts to two-thirds or more of the retail price of a pack of cigarettes. In the lower-income countries, taxes generally amount to not more than half of the retail prices of cigarettes.