One out of three cigarettes smoked in Hong Kong last year was illicit, according to a story in the South China Morning Post citing a study by two overseas think tanks.
The displacement of licit by illicit cigarettes was said to have cost the government more than HK$3.2 billion in ‘lost tax revenue’.
The multi-state Illicit Tobacco Indicator study conducted by UK-based Oxford Economics and the US-based International Tax and Investment Center (ITIC) suggested that the illicit cigarette consumption rate in Hong Kong accounted for up to 33.6 percent of the 1.8 billion cigarettes smoked there last year.
Of the 14 countries studied, Hong Kong had the third highest consumption rate after Brunei and Malaysia, which ranked first and second, respectively.
The findings were contested by the Hong Kong Council on Smoking and Health. A study carried out by the council and the University of Hong Kong showed the illicit-cigarette consumption rate during 2012 was between 8.3 percent and 14.0 percent.
The report by ITIC and Oxford Economics for the same year suggested the figure was 35.9 percent.
ITIC president, Daniel Witt, was quoting as saying the high rate of illicit-cigarette consumption last year was caused by substantial tax increases on cigarettes, which had forced smokers to seek a cheaper alternative. He said cigarette taxes had risen by 50 percent between 2008 and 2009.
Witt was said to have ‘shrugged off’ suggestions that the study could be biased because it was partly funded by Philip Morris International.