Cigarette prices should be raised to NT$140 per pack in order halve the current smoking rate, according to recommendations made by the United Medical Foundation.
The foundation, along with David Levy, an economics professor at the University of Baltimore, yesterday announced the findings of research into the relationship between Taiwan's tobacco prices and the smoking rate.
According to Levy, the tax rate suggested by the World Health Organization (WHO) would set the price at NT$100 per pack, about double the current price, which is expected to bring the smoking rate from the current 47.3 percent of the population to 29.5 percent in 20 years.
At NT$140 per pack, the equivalent of cigarette prices in Hong Kong and Singapore, the smoking rate is expected to drop to 21.8 percent.
At NT$50 per pack, the smoking rate would drop to 36.8 percent, according to the foundation.
"One benefit of raising the tax on tobacco is a reduction in medical care fees. At NT$140, revenues equivalent to about one-third to one-half of the National Health Insurance's current budget would be generated," Levy said.
He said that the economic costs of smoking, as a result of the loss of productivity caused by smoking-related diseases and the profits lost due to imported cigarettes, totaled NT$200 billion per year, or roughly 2.1 percent of Taiwan's GDP.
According to the study, revenue of NT$137.7 billion would be generated if cigarette prices were raised to NT$140.
The foundation also stressed that Taiwan's cigarette prices were among the lowest in the world. In Taiwan, the average amount of work time needed to earn enough to pay for a pack of cigarettes is 9 minutes.
The figure is 27 minutes in Hong Kong, 40 in Singapore, 56 in China, 17 in Korea, 20 in the US and 40 in the UK.
However, taking into account the inevitable resistance tobacco tax hikes would encounter, Levy conceded that gradual price adjustments would be more feasible.
"Those who don't take the issue seriously should realize that tobacco tax hikes are an important requirement for entry into the WHO," said C.P. Wen (溫啟邦), a research fellow at the National Health Research Institute.
He said Taiwan must comply with the goals set out by the WHO's Framework Convention on Tobacco Control in its petition for membership.
"This is something that requires the attention of the president and the premier. It's not something the Department of Health can do on its own," Wen said.
However, foundation representative Yang Hung-jen (