SCMP Friday, March 9, 2001

Anti-smoking campaigners hail extra duty


A rise in tobacco duty means Hong Kong's 800,000 smokers will pay about 70 cents more for a packet of cigarettes from today.
Mr Tsang raised the duty by five per cent, a move that will cost the average smoker an extra $128 a year if cigarette manufacturers pass on the increase to consumers. Government duty already accounts for about $15.30 of the cost of a $30 packet of cigarettes; it will now be $16. The increase will put an extra $130 million in the Government purse this financial year and contribute $580 million by 2004-05.
Anti-smoking campaigners welcomed the rise as a victory for public health that would save lives by reducing the number of smokers. But the tobacco industry warned that the illegal trade in cigarettes could become rampant if the increase was not accompanied by greater efforts to combat smuggling.
The Hong Kong Tobacco Institute said Hong Kong people smoked 158 million packets of cigarettes last year, and more than 19,000kg of cigars.
The chairman of the Hong Kong Council on Smoking and Health, Professor Anthony Hedley from the University of Hong Kong's department of community medicine, said the announcement was "excellent news".
"We can expect the price increase will reduce consumption, and that will follow through into the recruitment of young people as smokers and . . . given that half of all people who are regular smokers will die before their time, it will lead to a lower number of deaths," he said.
The executive director of the Tobacco Institute, Peter Tam Chung-ho, said a freeze on tobacco duty for the past two years, coupled with tough action against smugglers, had led to a substantial slowdown in the decline of duty-paid cigarette sales.
"But now they are increasing it, we would call on the Government to step up efforts against contraband cigarettes," he said.
"Any increase would push up the retail price and make contraband cigarettes more attractive, so at the same time the Government should consider taking additional measures to ensure the problem of contraband cigarettes does not become rampant."
Mr Tam said the retail price of cigarettes was higher in Hong Kong than anywhere else in Asia because of the high tax and high operating costs here. This made smuggling from countries where the sale price was lower a profitable venture.
Professor Hedley said this was untrue and that when prices were compared to gross domestic product per capita, Hong Kong was about average for the region, with the Philippines the most expensive place to smoke and Taiwan the cheapest.
And he said the industry's argument that higher tobacco duty led to more smuggling was "a complete sham and a fraud", as cheap cigarettes made smoking more affordable and led to a bigger market of smokers.
Mr Tsang said the rise in duty would not lead to more smuggling. Extra resources for the Customs and Excise Department last financial year had led to a 40 per cent rise in the number of successful anti-smuggling operations and a 70 per cent drop in the number of peddling "black spots".
"But we will not be complacent. The department will continue to step up enforcement to protect both government revenue and public health," he said.