DOH seeking NT$35 tax hike on cigarettes

Officials at the BHP under the Department of Health (DOH) said they are currently drafting revisions to rules in the Tobacco Hazards Prevention Act, as part of an ongoing campaign to stem the rising number of young smokers in the country by making cigarettes less affordable.

Under the draft amendment, the health tax would be raised 3.5 times in a single stroke, increasing the price to over NT$100 per pack.

The retail price for most popular brands of cigarettes stands at around NT$45 or NT$50 a pack.

Hsiao Mei-ling, director general of the bureau, defended the sharp jump, saying that raising the health tax in a gradual manner would be as ineffective as “trying to boil a frog in warm water.”

A recent survey by the bureau revealed the number of smoking teenagers has continued to rise, despite increasing the health tax previously to NT$10 from NT$5.

About 7 percent of Taiwan’s junior high school students — aged between 12 and 15 — are now smokers.

This proves that small and slow increases in the cost of the bad habit have failed to prevent juveniles from smoking, Hsiao said.

She said most young smokers wouldn’t be discouraged from lighting up by only a slight increase in cigarette prices, so the sharp boost of NT$35 for the costs per pack is warranted.

The BHP move was applauded by anti-smoking groups.

Lin Ching-li, head of the John Tung Foundation’s smoking prevention and control division, said that cigarette prices in Taiwan are currently among the lowest in the world.

Noting the United States and European countries have used health tax increases to curb smoking, Lin said she is optimistic the bureau’s move will prove effective in reducing the number of smokers in the country.

The BHP plans to introduce the amendment after the new Cabinet is formed later this month, according to Hsiao.

If the amendment is passed, the government’s annual revenue from the health tax could rise to about NT$90 billion a year from the current NT$20 billion.

However, smuggling and a possible drop in sales could cut into that amount and reduce total revenues to around NT$70 billion a year, the bureau estimated.

But members of the tobacco suppliers association here were shocked by the BHP’s plan.

They said the new rules were just ratified by the Legislative Yuan and promulgated by the president in July with formal implementation set for Jan. 11, 2009 after an 18-month buffer period.

The new rules stipulated a mechanism that will review the health tax at an interval of two years, with an average increase of the tax not exceeding 10 percent of the retail price each time.

The combined amount of all taxes should not surpass 80 percent of the retailing price of each pack of cigarettes, according to the rules.

They said the BHP should carry out administrative measures in accordance with the law and take actions step by step.

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