Increase in tobacco tax remains a good idea
A tax increase on tobacco was a necessary step to deter smoking. Health experts say it has proved effective and, indirectly, it raises funds for hospital services from people most likely to need them sooner or later. The tobacco industry tried to head off higher cigarette prices by warning they would lead to an increase in cigarette smuggling across the border. Anti-smoking activists said stronger law enforcement by customs officers was the answer to that.
Everything has gone according to script - up to a point. Smugglers and customs are fighting a running battle. Smuggling has flourished since a big tax increase in the budget two years ago and again this year.
In the first quarter this year customs officers seized more than 40 million contraband cigarettes worth HK$93.4 million, more than half last year's 76 million cigarettes worth around HK$140 million.
But a tax proposal can also have less predictable outcomes. Politically opposed lawmakers have become bedfellows, with about half of them expected to oppose the latest tax rise in Legco. For them, a deeply unpopular budget has transformed a tobacco tax from a community health issue to a livelihood issue for the poor.
Customs officials say it has also lured some of our older unemployed folk into acting as couriers for smuggling syndicates, carrying contraband cigarettes concealed in tailor-made clothing through the Lo Wu checkpoint up to five or six times a day. Plain-clothes officers follow them to gather intelligence on syndicate members.
Nonetheless, an increase in the tobacco tax remains a good idea. Admittedly it will hurt smokers among the lower socio-economic class. But before voting against it, lawmakers should consider that the tobacco industry opposes it because it makes it harder to hook young people. New smokers only maintain the burden of smoking related diseases on a health system now facing the demands of an ageing population. A wealthy society must have better ways of helping the poor.