Smokers in Hong Kong were hit with higher prices for their cigarettes after the second tobacco tax hike in a row came into effect. Photo credit: Bruce Mars, Pexels.
The tobacco tax in Hong Kong increased by nearly 32% as the government aims to provide additional motivation for smokers to quit. During his budget speech, financial secretary Paul Chan declared a rise in duty by HK$0.8 (US$0.10) per cigarette, effective immediately. This is the second tax hike in a row, following last year's tax increase of HK$0.6 (US$0.08) per cigarette. Last year’s increase was the first time since 2014.
The recent adjustment means an additional HK$16 (US$2.04) in tax on a 20-cigarette pack, bringing the total amount to HK$66 (US$8.43). Factoring in current prices, smokers may end up paying over HK$90 (US$11.50) for a single pack.
According to Chan, another tobacco tax hike after this is inevitable. "We expect that the proportion of tobacco duty in the retail price of cigarettes will rise to about 70%, gradually approaching the 75% level recommended by the World Health Organization," he said.
According to The Standard, the Long-Term Tobacco Policy Concern Group recently conducted a survey of approximately 1,000 smokers regarding the tax hike, and most respondents expressed their belief that it is not an effective measure. The group also asserted that the increase would widen the price disparity of cigarettes between Hong Kong and neighboring areas, potentially exacerbating illegal cigarette smuggling.
"Cigarettes in Hong Kong currently cost four to five times more than in the mainland. With frequent cross-border transportation and travel, there is no doubt that the issue of cigarette smuggling will intensify," it said.
Furthermore, the group urged the government to disclose data regarding the impact of the tax hike on smoking rates and to share their efforts in combating the illicit cigarette trade.