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.