Tax spending diverted

South Korea’s cigarette-tax revenue is this year forecast to reach three trillion won (US$2.8 billion) for the first time, according to a story in The Korea Herald citing government figures.

Revenue rose significantly from January 2015 when a tax increase helped pushed the price of cigarettes up by 80 percent from 2,500 won per pack to 4,500 won.

According to figures issued by the Ministry of Health and Welfare, revenues from taxes levied on tobacco products increased from 2.4 trillion won in 2015 to 2.9 trillion won in 2016.

And the ministry forecasts that the government could collect 3.06 trillion won this year.

The money the state collects from tobacco-product taxes should, in principle, be used to operate a national health promotion fund that covers the annual health care costs associated with smoking and ‘related diseases’.

However, complaints have been made because the extra tax revenue has been used for other purposes.

Last year, one billion won collected as part of the tobacco tax was allocated to other areas, such as building infrastructure related to telemedicine.