Inter-party negotiations at the Legislative Yuan on Friday reached a consensus to make amendments to the Tobacco and Liquor Tax Law (
If the legislature passes the draft, the revisions could take effect next year.
Last year NT$8 billion in tobacco tax was collected and legislators estimate that the latest tax hike could bring in another NT$4 billion for the government.
The draft amendment stipulates that for every 1,000 cigarettes sold, NT$400, instead of the current NT$250, must be paid in health taxes, translating into a $3NT increase per pack of cigarettes.
The Taiwan Tobacco and Liquor Corp said that in the interest of protecting the tobacco industry's workers, it would be better if the health tax were added directly to the price of the cigarettes instead of being levied on the quantity of cigarettes sold.
The corporation said that when the health tax is levied on quantity, the hike is more obvious in moderately priced cigarettes, such as the local brands, than in the more expensive imported brands. The increased tax would benefit private cigarette companies and discourage bootleg manufacturers, it said.
The corporation also said that it fully supports the rice wine revisions and is not opposed to the policy taking effect even before the Legislature votes on the draft.
However, the Department of Health's Bureau of Health Promotion expressed its doubts regarding the proposed revision. The bureau cited a survey of roughly 3,300 consumers conducted by the National Health Research Institute, stressing the institute's findings that the price of cigarettes needed to increase to NT$54 per packet to affect consumption.
"The NT$3 tax increase will give the overall tax revenue a substantial boost; however, when compared with the price of other consumer goods, the price increase to the NT$50 pack of cigarettes is not a big deal," the bureau said.
It further said that a pack of Marlboro cigarettes costs NT$50 in Taiwan, NT$127 in Hong Kong and NT$238 in New York, pointing out that, comparatively speaking, Taiwan's cigarette prices are low.
In an effort to abide by the World Health Organization's (WHO) policies, the bureau said Taiwan should take note of the WHO Framework Convention on Tobacco Control which encourages the increase of the price of tobacco products.
The bureau highlighted data from the World Bank indicating that for every 10 percent increase in cigarette prices, there was a 4 percent to 8 percent decrease in consumption.
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