Tobacco union protests increase in surcharge

EXPENSIVE HABIT::The health department has proposed doubling the surcharge to NT$40 to encourage more people to quit smoking, a health promotion official said

Staff writer, with CNA

Fri, Mar 08, 2013 - Page 5

The Confederation of Trade Unions of the Taiwan Tobacco and Liquor Co condemned a government proposal to double the tobacco surcharge, saying nearly half of revenues from tobacco sales already go into paying taxes and surcharges.

Bureau of Health Promotion Director-General Chiu Shu-ti (邱淑媞) on Tuesday revealed a proposal by the Department of Health to raise the tobacco surcharge to NT$40 (US$1.35) from NT$20.

Citing government statistics, the confederation said that a pack of cigarettes sells for an average of NT$70, with NT$31.8 — or 45.5 percent of the total — going into the payment of taxes and surcharges.

If import tariffs are included, the ratio of the combined charges would rise to 54 percent, a spokesman for the confederation said.

That compares with 55 percent in Australia, 58 percent in Japan and 40 percent in the US, the spokesman said.

“There is no room for a hike,” the spokesman said.

The confederation added that the tobacco tax and surcharge generates income of about NT$55 billion for the state coffers each year, while health insurance expenditure on medical care and treatment of smoking-related diseases reaches NT$30 billion a year, it said, citing research by the Taipei-based John Tung Foundation, an anti-smoking advocate.

The tax and surcharge on a single product is already so high that it surpasses the need for a tobacco health and welfare surcharge, it said.

The confederation added that 70 percent of revenues from the tobacco surcharge already go into covering expenditures under the National Health Insurance System, and the government should stop treating the surcharge as a bottomless purse for the system’s expensive operations.

Chiu on Tuesday said that local tobacco prices are cheap compared with neighboring countries such as Malaysia and Thailand.

Taking the purchasing power factor into account — the amount of goods or services that can be purchased with a unit of currency — the average price of cigarettes is US$4.18 per pack in Taiwan, US$4.35 in China, US$6.12 in Malaysia and US$5.45 in Thailand, data from the bureau showed.

Raising the tobacco surcharge will encourage more people to quit smoking, Chiu said, adding that she hoped the smoking rate among people over 18 in Taiwan could be halved from current levels within 10 years.

Bureau statistics showed that the smoking rate among people aged above 18 in the nation declined to 18.7 percent last year from 21.9 percent in 2008. About 470,000 people quit smoking in the four-year period, the bureau said.

According to the Tobacco Hazards Prevention Act (菸害防制法), a health surcharge of NT$1,000 should be imposed on every 1,000 cigarettes and authorities must review the amount of the surcharge every two years.

A surcharge of NT$5 per pack was first imposed in 2002, in response to demands by anti-smoking groups since 2000. It went up to NT$10 in 2006 and doubled again to its current rate of NT$20 in 2009.

Any proposed surcharge adjustment is subject to Cabinet review and approval, but it does not require an amendment to the act.