• May 23, 2024

Warnings on illegal trade

Hong Kong photo
Photo by Jonathan Kos-Read

A Hong Kong-based advocacy group has urged the government to step up enforcement against the illegal tobacco trade and warned it not to introduce measures that might jeopardize inroads that have been made into the trade, according to a story by Alex Fok for the Harbour Times.

Pollster Ipsos Hong Kong released this month a report on a survey into the public perception of the black-market cigarette trade. Commissioned by the organization, Hong Kong United Against Illicit Trade (HKUAIT), the researchers interviewed about a thousand Hong Kong adults in December.

The results show that 84 percent of the respondents considered illicit cigarettes to be a serious issue in Hong Kong.

Ipsos director Mick Gordon said that about three out of four respondents attribute the problem to sophisticated criminal networks, insufficient penalties and drastic excessive tax increases on cigarettes.

According to the latest Asia Illicit Tobacco Indicator 2015 report by Oxford Economics, Hong Kong’s illicit cigarette incidence has fallen by 6.7 percent since 2012, but remains at 29.1 percent, which is said to translate into an estimated HK$2.9 billion tax loss in the fiscal year 2015/16.

HKUAIT advisor Jeff Herbert warned that the tax loss could, in turn, fund criminal organizations and generate even greater indirect losses in terms of extra enforcement actions and prosecutions.

Herbert called for increased penalties, greater enforcement, public education and sensible tax rises amid negative factors such as ever rising costs of living and proximity to the mainland counterfeit market from where about 60 percent of these cigarettes were transported through land routes.

Meanwhile, Patrick Wong, executive director of HKUAIT, expressed concerns over a recent legislative proposal by the government to enlarge the size of health warnings on tobacco products from 50 percent to 85 percent, arguing that such a move would further reduce available space for tobacco manufacturers to print security and authentication features, resulting in a less secure supply chain that could facilitate the illegal trade.