One out of three cigarettes smoked in Hong Kong last year was illicit, costing the government more than HK$3.2 billion in lost tax revenue, a study by two overseas think tanks says. But the Hong Kong Council on Smoking and Health (COSH) says the results are "dubious". The Illicit Tobacco Indicator study - conducted by UK-based Oxford Economics and the International Tax and Investment Center (ITIC) in the US - suggests that the city's illicit cigarette consumption rate stood as high as 33.6 per cent of 1.8 billion cigarettes smoked in 2013, causing a loss of HK$3.2 billion in taxes. Of the 14 countries studied, Hong Kong had the third highest consumption rate, after Brunei and Malaysia, which ranked first and second, respectively. The findings were contested by COSH. A study done by the council and the University of Hong Kong showed the consumption rate in 2012 was between 8.3 per cent and 14 per cent. The report by ITIC and Oxford Economics for the same year, however, suggested 35.9 per cent. Yesterday, at the Canadian Chamber of Commerce, ITIC president Daniel Witt said the high rate was caused by substantial tax increases for cigarettes which force smokers to seek a cheaper alternative - illicit cigarettes. He cited a 50 per cent rise in cigarette tax between 2008 and 2009. He shrugged off suggestions that the study could be biased as it was partly funded by Philip Morris International, an American tobacco company. But COSH chairwoman Lisa Lau Man-man said: "The tobacco industry and its supporters always express strong opposition to tobacco tax increases under the pretext it will lead to a surge in cigarette smuggling." The best way to combat illicit smoking, Lau said, was through education and law enforcement.
