Category: Taxation

  • Tobacco taxes healthy

    Tobacco taxes healthy

    Indonesia’s finance minister, Sri Mulyani, has suggested using revenue from the country’s tobacco excise tax to cover the health and social security agency’s (BPJS) annual funding shortfall of IDR9 trillion (US$664 million), according to a story by Coconuts Jakarta relayed by the TMA.

    The reason given was that tobacco-related illnesses contributed to the deficit.

    The story claimed that smoking prevalence in Indonesia might be as high as 70 percent among adult males.

    Indonesia is said to suffer more than 200,000 tobacco-related deaths a year.

    “Many people are sick due to smoking, so it’s logical that it should become one of the solutions, meaning using state revenue coming from tobacco products,” the finance minister said.

    Boediarso Teguh Widodo, a director general at the ministry, estimated that government revenue from tobacco was about IDR14 trillion (US$1.03 billion) and of that about IDR5 trillion (US$369 million) could be earmarked for BPJS.

  • Cigarette tax rise predicted

    Cigarette tax rise predicted

    Japan’s government plans to increase tobacco tax by ¥3 per cigarette, according to a story in The Jiji Press citing ‘informed sources’.

    Currently, the tax per cigarette stands at about ¥12.2. The tobacco tax was last raised in October 2010, by ¥3.5 per cigarette.

    To avoid a steep plunge in tax revenue due to the potential decline in consumption that might occur after a tax rise, the tax will be raised in stages of ¥1 per cigarette over four years, starting in fiscal 2018.

    The government plans also to raise taxes on heat-not-burn tobacco products, which have become popular recently. Details about the increase in taxes on these products, which currently attract a lower rate of tax than do combustible cigarettes, will be discussed later.

    The tobacco tax increase will be included in the government’s fiscal 2018 tax-reform package, which is expected to be published on December 14.

  • Sales falling in South Korea

    Sales falling in South Korea

    Cigarette sales in South Korea are expected to fall by 5-6 percent this year, according to a Yonhap News Agency story quoting an official at the Ministry of Health and Welfare.

    Sales fell by 23 percent, from 4.3 billion packs in 2014 to 3.3 billion packs in 2015, after the government imposed a cigarette-tax increase at the beginning of 2015 that took the prices of cigarettes from 2,500 won to 4,500 won a pack.

    Sales increased by nine percent to 3.6 billion packs in 2016 but they are set to fall to 3.4 billion packs this year.

    At the same time, the smoking rate for men over 19 years old fell to 39.4 percent in 2015 from 43.1 percent a year earlier, the first drop since 1998, when the smoking rate was first tallied.

    The smoking rate among this group rose to 40.7 percent in 2016 but is expected to drop again this year,

    “Cigarette sales have declined this year from the previous year as the graphic warning images and the expansion of non-smoking zones have taken effect,” the official was quoted as saying.

    The government mandated in 2016 that tobacco companies place graphic warnings on the upper part of cigarette packs and, earlier this year, it said that those warnings should occupy 30 percent of the front and back of cigarette packs.

    The graphic warnings must be placed on packs of e-cigarettes and chewing tobacco, too.

    South Korea has been expanding non-smoking zones in public places for the past few years, but such measures have fallen short of a far-reaching ban.

    And the country allows some cigarette advertising, promotions and sponsorships.

  • Vapers face jail

    Vapers face jail

    Hong Kong will put forward ‘very soon’ an amendment to an existing bill that will tighten controls on electronic cigarettes, according to a story in the Hong Kong Standard quoting the Food and Health Secretary Sophia Chan.

    Currently, it is not against the law to sell or possess e-cigarettes, though possessing those that contain nicotine can lead to a two-year prison term or a HK$100,000 fine.

    Chan was quoted as saying that tobacco companies often claimed that e-cigarettes were less harmful than was “tobacco”, but that the “opposite may be true”.

    “Evidence that we have collected globally [shows] that e-cigarettes are harmful and many of the substances in the e-cigarette cartridge are actually carcinogenic and harmful to health,” Chan said.

    “So therefore there is a need for the government to strengthen the regulatory framework for e-cigarettes in Hong Kong.”

    It was clear from the story what form the new restrictions or bans would take.

    Chan was speaking to reporters at a tobacco control conference in Wan Chai, where she was also asked if the government would raise tobacco duty next year after a three-year freeze.

    She said the government would look at World Health Organization recommendations, but added that there was more to consider than just tax when it came to tobacco control.

    Hong Kong’s Council on Smoking and Health has urged the government to double the tax on combustible cigarettes, claiming that such a move could reduce the number of smokers in Hong Kong to five percent of the population in 10 years’ time.

    For reasons that aren’t clear, many people believe that a country that reduces its cigarette-consuming population to five percent would have eliminated tobacco smoking.

  • Double or quit

    Double or quit

    The Hong Kong Council on Smoking and Health has recommended that a tax hike should be used to push the price of cigarettes from about HK$57 a pack to HK$100 a pack, according to a story by Riley Chan for the Hong Kong Standard.

    The Council, described as a policy advisory body, called for the hike after it saw the results of a survey it commissioned from the School of Public Health of the University of Hong Kong (HKU): The Tobacco Control Policy-related Survey 2017.

    The survey researchers interviewed by telephone 2,002 people aged 15 and older from April to October this year.

    They were said to have found that more than 80 percent, 5.7 percent of them smokers, supported an increase in tobacco tax next year.

    More than 70 percent suggested that the tax should be increased annually.

    Of the 298 smokers, 47.3 percent agreed that an increase in the retail price would encourage them to quit smoking.

    The average increase in price suggested would take the price of a pack of cigarettes to HK$100.

    Currently, leading brand cigarettes are sold for HK$57 a pack, where tax accounts for 67 percent, or HK$38, of the price.

    To drive the price of cigarettes higher, the Council called on the government to double the tax, which is lower than the 75 percent recommended by the World Health Organization.

    Lam Tai-hing, chair professor of community medicine at HKU, said the current price was much lower than that in other developed regions.

    In Singapore, a pack of cigarettes was priced at the equivalent of HK$75, while in Britain and Australia, prices were HK$94 and HK$154 respectively.

    “Looking at the retail price in other countries and the tobacco tax increase in recent years, we don’t think doubling the tax is too much to ask for,” Lam said.

  • Russia goes for DIY tobacco

    Russia goes for DIY tobacco

    Russia’s economy started growing this year after two years of recession, but many people aren’t feeling any richer yet and this is something that is reflected in the cigarettes they are smoking, according to a qz.com story.

    Apparently, some smokers have turned to smoking cigarettes made with home-grown tobacco; so that while official figures indicate that smoking in Russia fell by about 20 percent between 2013 and 2016, the reality is probably somewhat different.

    Russians’ real disposable income fell for the fourth month in a row in October – a 1.3 percent drop from that of the same month of last year.

    In September, real wages were 13 percent lower than they were in 2014, when, according to Moscow’s Higher School of Economics, the recession started.

    Meanwhile, tobacco tax hikes have caused cigarette prices to nearly double since 2013 – a challenge to one of Europe’s heaviest-smoking populations.

    Hence the interest in growing tobacco at home.

    “Several governors have told me that last year people started planting tobacco in their dachas and gardens,” Sergei Ryabukhin, the head of the Russian Senate’s budget and finance committee said last week.

    “When you go to a region, you realize with horror that people have turned to growing tobacco or shag. According to official statistics [tobacco production] has fallen 21 percent and people are smoking less. But in reality it’s not like that.”

  • TTM workers protest

    TTM workers protest

    Members of the Thailand Tobacco Monopoly’s (TTM) labor union rallied outside the Finance Ministry on Friday to protest about the imposition of a new excise-tax structure, according to a story in The Bangkok Post.

    The workers at the state-owned TTM believe that the new excise-tax structure has caused a 41 percent drop in TTM’s cigarette sales, while providing an opportunity for foreign tobacco companies to boost their share of the market.

    The rally leaders had planned to present a petition to the ministry arguing that the new tax structure and associated drop in sales could affect their jobs, and the livelihoods of tobacco farmers and those working in related businesses.

    As with the previous tax structure, the new one is based in part on prices, but while the prices used as the basis for previous taxes were ex-factory or declared import prices, now they are based on suggested retail prices. The rates are 20 percent for a pack of cigarettes priced at not more than 60 baht, and 40 percent for a pack priced at more than 60 baht.

    After the new rates came into effect in mid-September, importers were said to have cut the suggested retail prices of some types of imported cigarettes to 60 baht a pack to take advantage of the new rates.

    The labor union foresees a sharp drop in the market share of its local cigarette brands during the next two years.

    In all, 2,950 TTM employees, 1,000 temporary workers, about 20,000 tobacco farmers and more than 500,000 operators of TTM-related businesses would be hurt by the drop in the sales volume caused by the new tax structure, according to the labor union.

  • Call for excise tax hike

    Call for excise tax hike

    Senator Manny Pacquiao wants to increase cigarette excise tax in the Philippines from P30 to P60 a pack from next year, according to a story in the Philippine Star.

    And he wants cigarette excise to be increased by nine percent each year after that.

    In proposing Senate Bill 1599, which seeks to amend RA 10351, otherwise known as the sin tax reform law, Pacquiao said the measure would reduce smoking prevalence and increase government revenues.

    Pacquiao said the sin tax law had been successful in curbing smoking, especially among poor and rural people.

    It had contributed also to increasing the national budget for health from 2012-2016 from P57 billion to P123 billion.

    The price of cigarettes in the Philippines is low compared to that in other countries.

    The Star said that one survey had shown that while a pack of a particular brand of cigarettes sold for US$1.18 in the Philippines, in Australia it sold for US19.82 a pack, in Singapore for US$9.66, in Hong Kong for US$7.30, in the US for US$6.77, in Japan for US$4.04, in Thailand for US3.67, in China for US$3.04, and in Indonesia for US$1.48.

  • Tax change hits local sales

    Tax change hits local sales

    The Thailand Tobacco Monopoly (TTM) has asked the Finance Ministry to reconsider its new excise-tax structure, according to a story in The Bangkok Post.

    Under the new structure, TTM’s sales during the current fiscal year, which started on October 1 and which will end on September 30, 2018, are estimated to fall by 41 percent compared to those of the previous fiscal year.

    The deputy finance minister Wisudhi Srisuphan said yesterday the ministry was considering TTM’s request for a review of the new structure.

    Meanwhile, TTM’s employees are gathering signatures in support of filing a complaint against the ministry with the Administrative Court.

    As with the previous tax structure, the new one is based on both quantity and prices, but while the prices used as the basis for previous taxes were ex-factory or declared import prices, now they are based on suggested retail prices. The rates are 20 percent for a pack of cigarettes priced at not more than 60 baht, and 40 percent for a pack priced at more than 60 baht.

    After the new rates came into effect in mid-September, importers were said to have cut the suggested retail prices of some types of imported cigarettes to 60 baht a pack to take advantage of the new rates.

    And in doing so they have taken market share from the TTM.

  • Minimum pricing mooted

    Minimum pricing mooted

    Setting a minimum price for tobacco products could be used as part of a campaign to reduce the number of smokers in Scotland, according to a BBC Online story.

    The proposal was made after the Scottish government announced it would introduce minimum alcohol pricing from next May.

    Public health experts in Scotland are suggesting, too, that raising the price of tobacco products and reducing their availability, in part by incentivising retailers not to sell them, might help tackle health inequalities.

    NHS [National Health Service] Health Scotland and the Scottish Collaboration for Public Health Research and Policy (SCPHRP) at the University of Edinburgh have put forward these and other ideas as part of a new national tobacco strategy.

    They want to see also mass media campaigns to encourage smokers to stop, and to reduce exposure to second-hand smoke.

    They recommend that effective policy actions should focus on reducing health inequalities.

    Twenty-one percent of adults in Scotland smoke, down from 28 percent in 2003.

    However, adult smoking levels have been static since 2013.

    And rates are still highest in the financially poorer areas of the country, with 35 percent of adults in the least well-off areas smoking compared to 10 percent in the most well-off areas.

    Dr. Garth Reid, principal public health adviser at NHS Health Scotland and one of the study’s authors, said Scotland’s health was improving but that the gap between the health of the best and least well-off was widening.

    NHS Scotland claims that smoking causes more than 10,000 deaths a year.