HK tobacco tax frozen for third year running

Hong Kong’s tobacco tax remains unchanged for the third straight year, following the latest government budget announced Tuesday 21 February. Tobacco was not mentioned in the budget speech.

The Hong Kong Council on Smoking and Health (COSH) expressed disappointment in the budget. Antonio Kwong, COSH chairman said: “Raising tobacco tax is the single most effective measure to lower the smoking prevalence and deter youth from starting to smoke. Tobacco tax has been frozen for three consecutive years in Hong Kong, which further weakens the price effect on reducing tobacco use.”
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Hong Kong tax revenue from tobacco has grown significantly in recent years but cigarette prices are still relatively low. According to COSH, cigarette price of the major brands in Hong Kong is about HK$57 per pack, compared to other developed regions such as Australia (about HK$143), New York (about HK$101), United Kingdom (about HK$87) and Singapore (about HK$70).

A landmark 2012 review of over 100 academic studies found that tobacco excise taxes are a powerful tool for reducing tobacco use. Significant increases in tobacco taxes that increase tobacco product prices encourage current tobacco users to stop using, prevent potential users from taking up tobacco use, and reduce consumption among those that continue to use, with the greatest impact on the young and the poor[1].

According to the Financial Secretary Paul Chan’s budget speech, Hong Kong’s priorities are to stimulate domestic consumption, increase spending in social welfare, invest in services for the elderly and to invest in sports development.

[1] Chaloupka, F. J., Yurekli, A., & Fong, G. T. (2012). Tobacco taxes as a tobacco control strategy. Tobacco Control, 21(2)

 

About James Ockenden (223 Articles)
A writer covering international energy and power markets since 1996
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