Tobacco tax hike deters young people from starting to smoke
A recent report funded by the tobacco industry claimed that the illicit cigarette problem in Hong Kong is serious.
A spokesperson for the study said the key drivers included tobacco tax rises in 2009 and 2011 and strength of enforcement against smuggling by the government. Hong Kong Council on Smoking and Health (COSH) has expressed reservations on its findings and believes there is no causal link between tobacco tax rise and the surge in illegal cigarettes.
The tobacco industry always opposes increases in tobacco levies arguing that they intensify cigarette smuggling activities, but there is no evidence to support this. In fact, smuggling is also found in countries with a lower tobacco tax, like Malaysia (tax accounts for 53.7 per cent of the retail price) and Vietnam (41.59 per cent). Canada and Sweden attempted to combat cigarette smuggling in the 1990s by reducing tobacco tax, resulting in a hike of consumption and contraband cigarettes seizure.
The World Health Organisation believes the most effective measure against smuggling is tight control and aggressive enforcement. Hong Kong Customs and Excise Department is determined to undertake stringent enforcement against illicit cigarette activities. A total of 65 million sticks of illicit cigarettes were seized in the first nine months of this year, an increase of over 30 per cent compared to the same period last year. The most effective way to tackle the root of the problem is to strengthen law enforcement and publicity and educate the public on the illegitimacy of illicit cigarettes.
A significant tobacco tax hike deters young people from starting smoking and encourages smokers to quit. The World Bank claims every 10 per cent increase in the price of a packet of cigarettes results in a 4 per cent decrease in tobacco consumption in high-income regions like Hong Kong.
Hong Kong's tobacco levy accounts for only 65 to 68 per cent of the retail price, which is below the standard suggested by the WHO (at least 70 per cent). Compared to Asia-Pacific countries like Singapore, and EU countries, whose tax is over 70 per cent, Hong Kong's rate is lenient.
Each year, smoking causes nearly 7,000 deaths in Hong Kong, including 1,324 non-smokers, as well as HK$5.3 billion economic loss.
To save lives, we want the government to implement a progressive and long-term tobacco tax increment policy and strengthen smoking cessation services.
Lisa Lau, chairman, COSH