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Tobacco tax hike deters young people from starting to smoke

PUBLISHED : Monday, 28 October, 2013, 3:26am
UPDATED : Monday, 28 October, 2013, 5:47am

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

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This article is now closed to comments

johnyuan
Raising price can only reduce smoking momentarily. Targeting the youth is a futile act. We should target the entire society. Make smoking at least to be seen as a disgusting behavior in the public. This was what New York City had done and to much ‘disgust’ stopping European tourists carelessly lighting up in public. It is the communal force that clams down the individual’s crave in NYC.
dynamco
This big business friendly Govt appallingly panders to the tobacco company death merchants.
Bowtie took a free trip from Macau on a tobacco tycoon's boat just 2 weeks after there was no tobacco tax increase in his last Budget.
There have been only two tobacco tax increases since 2001
The cost including loss of life to HK society at 1998 prices was HKD 73 billion per annum whilst tax income is currently less than HKD 5 billion. There will soon be an updated peer reviewed study revealed showing the current staggering costs to HKG society of tobacco related diseases.
Taking a standard control pack M, the retail tax incl price in HKG is HKD50, in Singapore it costs HKD 76, in London HKD 84, in New York HKD 85, Dublin HKD 93, Brisbane HKD 129 yet HKG has a higher cost of living than all the above cities; meaning the elasticity or affordability of cigarettes to HKG youth remains far too low & tobacco is freely accessible, vendors are not licensed nor inspected for youth sales compliance & blatant tobacco funded fronts try to hint that taxation causes increased smuggling. The fact remains that 60% of illegal tobacco found in the local market is GENUINE product, smuggled by deliberate non-control of manufacturer supply chains + leaked duty free.
By failing to match international city taxation levels this pathetic Govt leaves tobacco affordable to inquisitive youth, ignores FCTC Treaty requirements & sentences the young nicotine addicts to a slow lingering death. Plain packs?

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