Cigarette price hike looking likely after move to raise tax

The Department of Health's Bureau of Health Promotion is drafting amendments to the Tobacco Hazard and Control Act that would increase the health tax on cigarettes by 350 percent.

Under the draft amendment, the tax would be raised to NT$45 per pack of cigarettes from NT$10 per pack.

The move is being made in part to counter the trend of the rising number of young smokers by making cigarettes less affordable.

A recent survey by the bureau revealed that about 7 percent of Taiwan's high school students are smokers.

Hsiao Mei-ling (蕭美玲), director general of the bureau, defended the sharp increase, saying that "raising the health tax in a gradual manner would be as ineffective as trying to boil a frog in warm water."

She said most young smokers wouldn't be discouraged from lighting up by a slight increase in cigarette prices, so the NT$35 per pack increase is warranted.

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

Noting that the US and European countries have used health tax increases to curb smoking, Lin said she was optimistic that the bureau's move would prove effective in reducing the number of smokers.

The Bureau of Health Promotion plans to introduce the amendment after the new Cabinet is formed later this month, Hsiao said.

If the amendment is passed, the government's annual revenue from the health tax could be expected to rise to about NT$90 billion (US$2.78 billion) a year from the current NT$20 billion, but smuggling and a possible drop in sales could cut into those revenues and lower the total receipts to NT$70 billion a year, the bureau said.