Tag: South Korea

  • Considering fairer taxes

    Considering fairer taxes

    The new president of South Korea, Moon Jae-in, is to examine the possibility of making tax-free cigarettes available to low-income earners, according to a story in The Korea Herald.

    A cigarette excise tax increase by the previous administration at the start of 2015 raised the price per pack from 2,500 won ($2.20) to 4,500 won.

    The tax increase was widely criticized as being regressive, while not lowering cigarette consumption significantly. According to market research firm Nielsen Korea earlier this year, cigarette consumption in 2016 rose 9.3 percent from that of 2015, showing that the effect of higher prices on cigarette sales had mostly dissipated.

    During his campaign, Moon said that the excise tax was unfairly burdensome on low income smokers.

    The Herald reported that industry watchers had not expected Moon to lower the tax because the increased tax revenue would be necessary to fund campaign pledges.

    However, according to an opinion piece by Park Moo-jong published in the Korea Times at the end of April, of the five major candidates in the May 9 presidential elections in South Korea, four had vowed to freeze cigarette prices and one had pledged to cut them. Hong Joon-pyo, at the time a conservative front-runner, reportedly said that, if elected, he would cut cigarette prices from 4,500 won (about US$4) to 2,500 won a pack.

    A spokesman for President Moon’s administration said yesterday that cigarette taxes would remain at their current level.

    “Instead of lowering the tax, we are looking into the possibility of creating tax-free cigarettes for low income consumers,” the president’s spokesman Hong Ik-pyo told The Korea Herald.

    But Hong said that no timeframe has been set for the introduction of the lower-priced cigarettes.

  • Tax increases ruled out

    Tax increases ruled out

    Of the five major candidates in the May 9 presidential elections in South Korea, four have vowed to freeze cigarette prices and one has pledged to cut them, according to an opinion piece by Park Moo-jong in the Korea Times.

    Hong Joon-pyo, a conservative front-runner, reportedly ignited an online dispute over whether to raise or lower cigarette prices when he said that, if elected, he would cut prices from 4,500 won (about US$4) to 2,500 won a pack.

    In effect, he would return prices to their 2014 level. On January 1, 2015, the government imposed a tax increase that took the price of cigarettes from 2,500 won to 4,500 won.

    “Cigarettes are a thing that low-income people smoke mainly out of anger or because they cannot quit,” Hong was reported to have said. “It is not right to take advantage of this and to empty their pockets, thus fattening the national wallet.”

    The other four major contenders, including Moon Jae-in and Ahn Cheol-soo, are said to have vowed to freeze prices.

    All five candidates have promised in principle that they will use cigarette tax revenue for the promotion of health.

  • Smoking linked to earnings

    cigarettes in South Korea photo
    Photo by France1978

    High income earners in South Korea smoke less than do those on lower incomes, according to a story in The Korea Herald citing a recent survey.

    The results of the survey, which were published on Monday, were said to have shown that South Korea’s smoking trends were starting to mirror those of ‘more advanced countries’ where smoking rates continued to fall.

    The survey was conducted by Seoul National University Hospital among 1.59 million people between 2008 and 2014 by professor Kang Young-ho.

    The trend of higher smoking rates among lower income earners was said to have been found among male smokers in 236 cities and counties of the 245 examined.

    The comparable figures for female smokers were 239 cities and counties out of 245.

    By region, the smoking rate among males in the upper 20 percent income bracket was the lowest, at 26.4 percent, in Bundang-gu, Seongnam City, Gyeonggi Province, while it was the highest, at 59.8 percent, in Taebaek City, Gangwon Province.

    Jangseong County, South Jeolla Province, with 0.2 percent, had the lowest smoking rate among women in the upper 20 percent income earning range, while Dongducheon City, Gyeonggi Province, with 13 percent, had the highest smoking rate among this group.

  • Smoking shifts

    shift worker photo
    Photo by conner395

    People who work shifts or irregular hours are more deprived of sleep and some are more prone to smoking and drinking than are people who work regular daytime hours, according to a story in The Korea Herald citing a survey carried out in South Korea.

    The findings, published by Professor Song Yoon-mi of Samsung Medical Center, said women in their 50s were the most susceptible to developing problems because of their work schedules.

    The ratio of smokers among female shift workers was 1.73 times that of daytime workers, according to the survey conducted with 11,680 people.

    But the ratio among female shift workers in their 50s was 5.55 times higher than was the case with daytime workers.

    The data showed the number of male shift workers who suffered from sleep deprivation was 1.18 times that of daytime workers.

    But it indicated that there was no significant difference in the smoking and drinking habits of male shit workers and male daytime workers.

  • Flying into trouble

    South Korean Airlines photo
    Photo by BIG FOOT11

    Illegal acts aboard airplanes, especially smoking, are on the rise, South Korea’s Ministry of Land, Infrastructure and Transport reported on Monday.

    According to a story in The Korea JoongAng Daily citing the ministry report, the number of violations, which include smoking, verbal abuse and sexual harassment in-flight, grew by 11 times from 2012 through 2016.

    The number of smoking violations during the same period increased by more than 40 times.

    In 2012, there were a total of 40 violations, but this number rose to 443 in 2016.

    And the number of smoking violations rose from nine cases in 2012 to 360 last year.

    Smoking violations accounted for 75.6 percent of the total violations during the past five years.

    The ministry records only those violations that result in an arrest by airport police.

    “Such increases are largely due to weak punishment on violations,” said Hong Chul-ho, a lawmaker from the Bareun Party, a spinoff of the former Saenuri Party, in a statement on Monday.

    “Currently, violators are subject to less than 10 million won ($8,678) in fines under the Aviation Safety and Security Act, but in real life less than 1 million won fine is imposed.”

  • Prosecutors raid KT&G over alleged corruption

    Prosecutors announced on Oct. 2 that they have raided the headquarters of KT&G, South Korea’s leading tobacco maker, due to allegations that the company created slush funds in the process of taking over other companies, according to The Korea Herald.

    The office of Min Young-jin, the former head of KT&G Corp., as well as that of his secretary, were included on the list of raids, the Seoul Central District Prosecutors’ Office said. Prosecutors confiscated from the state-run tobacco firm accounting books and transaction information regarding KT&G’s business partners. They suspect Min created secret funds while taking over and managing a local cosmetics company and a bio venture company that has become KT&G’s affiliate.

    Min resigned in July, when prosecutors launched the investigation.

  • Anti-smoking research institute to open in South Korea

    The South Korean government will open an anti-smoking research institute next month, where the ingredients found in tobacco will be studied and the harmful effects of smoking will be assessed. Data gathered at the institute will likely to be used in the government’s ongoing lawsuit against tobacco companies over compensation for health care costs linked to smoking-related diseases.

    According to the Korea Centers for Disease Control and Prevention (KCDC), the institute will be set up at the KCDC’s headquarters in Osong, North Chungcheong province, at the end of October.

    According to the Ministry of Health and Welfare, the institute’s major objectives include analyzing the ingredients and additives in cigarettes and cigarette smoke, as well as assessing the damage of secondhand exposure. Cigarette makers in South Korea are currently required only to disclose the amount of tar and nicotine present in their products, keeping secret what other ingredients or additives—such as menthol and sugar—are included.

    “Such studies have so far been conducted by private institute or the tobacco makers, often facing criticism for lacking credibility,” a KCDC official was quoted as telling the Korea Times. “Government-level studies so far have focused on epidemiological research, but the new institute will concentrate on discovering any direct correlation between smoking and health hazards. Study results will be used for setting up anti-smoking policies and as evidence for the ongoing suit.”

    In addition to studying the types and amounts of ingredients—such as nicotine, tar and ammonia—found in cigarettes sold in Korea, the institute will also examine samples of hair, urine and blood to determine the impact of secondhand smoking and its connection to cancer, cardiovascular and infectious diseases, and developmental disorders.

    The National Health Insurance Service (NHIS) filed a compensation suit last year with the Seoul Central District Court against three tobacco companies, KT&G, Philip Morris International and British American Tobacco Korea. In the suit, the NHIS demanded 53.7 billion won ($45 million) to recoup the medical costs the organization covered for 3,834 smokers who suffered from cancer of the lungs or larynx.

  • South Korea’s tobacco tax revenue expected to soar next year

    Tax revenue from cigarette sales in Korea is expected to reach more than 12.68 trillion won ($10.72 billion) next year, nearly double the increase from 2014, according to a report shown Monday by the independent Korea Federation of Taxpayers.

    The Korea Federation of Taxpayers said in its report that the increase is attributable mainly to the sharp tax hike early this year but little reduction in sales volume. The tobacco tax hike was introduced as part of the government’s strategy to reduce the smoking rate in Korea.

    The government raised a total of 6.74 trillion won in tobacco tax revenue in 2014 before the tax hike took effect on Jan. 1. This year, it is estimated that the government will collect 11.17 trillion won, up 4.42 trillion won from the previous year. The government had predicted that the tax revenue would increase only by about 2.78 trillion won this and next year, respectively, as sales were expected to drop due to the price hike.

    Once the new cigarette pricing went into effect, the price of cigarettes increased to 4,500 won, up 80 percent from the previous 2,500 won. From January to June, the government collected approximately 4.3 trillion won in tax revenue from tobacco sales, up 1.2 trillion won from the year before. During the same period, cigarette sales decreased by 28.3 percent due to the tobacco tax hike.

    Although tobacco sales plunged early this year as a result of the sharp price hike, sales have begun to show signs of recovery.

  • Price hikes result in KT&G profit surge

    KT&G’s first-quarter operating profits and revenue have increased significantly compared to the same period last year, due to price hikes and improvements in its affiliates’ performances, according to a story in the Korea JoongAng Daily.

    South Korea’s No. 1 cigarette and ginseng company’s operating profit increased by nearly 65 percent year-on-year to krw428.5 billion ($395 million). The company’s net profit increased by 55 percent to krw308.8 trillion.

    Although the company’s sales increased by value to 18 percent from one year ago—to krw1.14 trillion by volume—because of the increased prices of cigarettes, sales have actually decreased. KT&G sold 7.1 billion cigarettes in this year’s first quarter, a 41.4 percent decrease from the first quarter of last year, during which the company sold 12.2 billion cigarettes. The price hike has allowed KT&G to earn krw1,768 in profit on inventory cigarettes per packet.

    The company plans to spend the krw330 billion it earned in profits on the price change by giving back to the community.

  • South Korea considers stricter e-cigarette regulations

    The government of South Korea plans to push for tougher legal restrictions on the sale of e-cigarettes, the finance ministry announced April 22. Finance Minister Choi Kyung-hwan, who also serves as deputy prime minister, told lawmakers in the National Assembly that he would soon “come up with a comprehensive proposal” on e-cigarettes that would ban explicit advertisement of the products, according to a story in The Korea Herald.

    According to the country’s health and welfare laws, tobacco product advertising is only allowed inside authorized stores, however, many local e-cigarette dealers explicitly display advertisements and fliers for the products—which are officially classified as cigarette products—on the streets.

    “We will see to a comprehensive measure in cooperation with other related ministries,” Choi said.