This report summarises the health consequences and costs associated with tobacco use. It review price trends in government tobacco tax revenues and how tobacco products are currently taxed in these countries. The third section examines the demand for tobacco products in south-east Asian countries. A literature review on the demand for tobacco products in developing countries is sollowed by new analysis using time series and household-level data. The revenue-generating potential of tobacco taxes in south-east Asian countries is discusses. Finally, the report discusses contraband trade in tobacco products in south-east Asia, with emphasis on the industry's alleged role in smuggling.