Tobacco smoking causes a wide variety of serious diseases including stroke, chronic obstructive pulmonary disease (COPD) and lung cancer. The total costs of in-patient health-care of these smoking-related diseases in Lao PDR reached LAK 28,507,000,000 (USD 3,341,577) in 2007, representing 0.8% of Lao PDR’s GDP and 22% of Lao PDR’s health expenditure. Households directly financed 77% of these costs; the rest was financed either by the government (21%) or by the insurance sector (2%). From these findings, it can be seen that health-care costs are mainly borne by families themselves and given that the majority of these families are poor, greater challenges will emerge if effective measures are not taken to curb smoking in the country.