China doubles tax on cigarettes to stub out smoking
China aims for win-win strategy to raise government revenue by targeting smokers' pockets to turn them off the unhealthy habit
China, the world's biggest maker and user of tobacco, has increased taxes on cigarettes to discourage smoking and raise government revenue.
From Sunday, taxes on wholesale cigarettes will rise to 11 per cent from 5 per cent, and individual cigarettes will cost an extra 0.005 yuan each, the State Administration of Taxation said on its official microblog.
The increase will rake in an additional 20 billion yuan (HK$25 billion) in taxes for the government this year compared with 2014, according to a source familiar with the matter. The source asked to remain anonymous as the figure had yet to be released to the public.
The mainland is home to more than 300 million smokers - nearly a third of the global total - and about one million deaths in the country each year are caused by tobacco use, accounting for one in six of all tobacco deaths worldwide, according to the World Health Organisation.
"Smoking is, without doubt, a high-risk factor for many diseases," Chua Tsin Tien, a specialist at the Hong Kong Sanatorium and Hospital's clinical oncology department, said.
"The most effective way of cutting lung cancer mortality rates is to reduce the amount of smoking.
"More than anything, [China's increase in cigarette taxes] sends a message that the state will no longer tolerate smoking the way it used to."
In Hong Kong, the territory's policy of increasing tobacco taxes had helped cut the incidence of lung cancer in the city, Chua said.
"After 10 years of continuing taxation [in Hong Kong], if you look at the total number of patients with lung cancer in the city, that number is increasing, because of an ageing population. But if you adjust that number for age, you will find that the incidence of lung cancer is actually decreasing," Chua said.
The mainland has followed the lead of other countries and sought to restrict smoking at public indoor places such as bars and restaurants.
The authorities have over the past few years also discussed launching an anti-smoking campaign, but plans remain unclear.
Hu Xingdou, an economist at Beijing University of Technology, said vested interests from the tobacco industry were to blame for the inaction.
"In several key provinces, the tobacco tax revenue is very high. But on a countrywide scale, it is considered low against the international standard," Hu said.
CCTV had earlier reported that 45 per cent of Yunnan province's tax revenue comes from tobacco.
"The government is trying to kill two birds with one stone," Hu said. "China will get higher tax revenues from tobacco wholesalers, who will pass on the price burden to consumers, who will then hopefully stop smoking as much."
