Prices of local and imported cigarettes and alcohol will increase by up to 25 percent starting tomorrow, despite the belief by some that prices should fall ahead of Taiwan's upcoming entry into the WTO.
Average price increases for brands such as Malboro and Seven Milds will be around NT$10, 25 percent of the retail price, with an additional 5 percent business tax tagged on to the price of each 1,000 lot of cigarettes, Chinese-language media reports said.
The increase incorporates a cigarette and alcohol tax of NT$590 and a "health surcharge" of NT$250 per 1,000 cigarettes.
The price increase on less expensive local cigarettes, such as Long Life (長壽), is also expected to be high.
A new tax of 5 percent will also be levied on foreign liquor imports. All alcoholic beverages are also subject to a NT$185 tax per liter. The increased cigarette prices will come as the "health surcharge," which was approved by the legislature in June, is implemented on Jan. 1.
The price change was made possible following the passage of Article 22 of the "Tobacco and Liquor Tariffs Law" in March last year
Seventy percent of the the new revenue from the health charge will go to the Bureau of National Health Insurance, while 20 percent will be given to the Department of Health for campaigns to discourage smoking. The remaining 10 percent will be given to the Ministry of the Interior, which will disperse the revenue to a variety of social welfare funds.
Bucking the central government's new tax plan, Kinmen County officials announced yesterday that only the 5 percent business tax will be added to the price of the local rice wine -- Kaoliangchiu (
Officials said that in order to compete with rice wine from other countries -- especially those from China and Japan -- they need to keep the price low.
Kinmen rice wine accounts for 70 percent of the local market.
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