The Cabinet yesterday passed a draft amendment to raise the tax on cigarettes, as well as the health and welfare surcharge on tobacco, by NT$25 per packet in a bid to help 740,000 people quit smoking, or a decline of 20.8 percent, officials said yesterday.
Under the amendments to the Tobacco Hazards Prevention Act (菸害防制法) and the Tobacco and Liquor Tax Act (菸酒稅法) approved at a Cabinet meeting, the health and welfare surcharge per pack of cigarettes would be raised to NT$40 from NT$20, while the tax on cigarettes would be increased to NT$16.8 from NT$11.8.
Even if the legislature approves the amendment, Taiwan would still not meet the standard set by the World Bank in which the tax, and health and wealth surcharge on cigarettes, should account for between 67 percent and 80 percent of the price, Department of Health Vice Minister Day Guey-ing (戴桂英) said.
Day said that an increase of NT$29 in the tax and surcharge is needed to meet the standard because the duties component currently accounts for only 54 percent of the price.
Cigarette prices are relatively low in Taiwan in comparison with the average price of NT$77 a packet in Thailand and NT$99 in Malaysia, but similar to the price of NT$68 in China, Day said.
Vice Minister of Finance William Tseng (曾銘宗) said the adjustments to the duties would result in a loss of NT$610 million (US$20.73 million) in tax revenue, but would bring in an additional NT$25 billion in health and welfare surcharges.
The revenues would be used to fund various welfare projects — to subsidize people who cannot afford to pay their health insurance premiums, on cancer screening, to set up care centers in remote areas and to fund vaccines for children, Day said.
Bureau of Health Promotion Director-General Chiou Shu-ti (邱淑媞) said the amendment would result in a long-term benefit of NT$296 billion, the savings in healthcare costs for people who quit smoking as a result of the increased duties and the productivity they contribute to the economy in the extended years they live after quitting smoking.