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Raise tax on tobacco

(China Daily)
Updated: 2008-12-17 07:56

What about another 1 yuan consumer tax on a pack of cigarette?

Experts say this tax increase would reduce China's smokers by more than 13 million. As a result, more than 3 million lives will be saved from cigarette-inflicted diseases. In addition, government revenue from the tax will rise by 64.9 million yuan.

Related readings:  Study: Raising tobacco tax will save lives

A report released on Monday by the China Smoking Control Association says that the retail tax rate on cigarettes in China is about 40 percent, much lower than the middle-level international rate of 65 to 70 percent. A 1 yuan increase in consumer tax will raise the rate to 51 percent, still lower than that in many developed countries.

China's total number of smokers is estimated at 350 million, accounting for 36 percent of its population above the age of 15, according to the report. It is estimated that more than 1 million people die from cigarette-related diseases every year, and this figure will likely double by the year 2020.

With the world's largest population of 1.3 billion, it is no surprise that both figures are also the biggest in the world. But that should never be the reason for us to ignore the damage that smoking causes to people's health and economic loss to the country.

It is estimated that the cost of smoking is 186 billion yuan a year, accounting for 1.9 percent of the country's GDP. The medical expenses for smoking-related diseases alone amount to 14 billion yuan a year, accounting for 3.1 percent of the country's total health-related cost.

Increasing consumer tax on cigarettes has proved to be an effective way to reduce the consumption of tobacco.

It is estimated that poverty-stricken families both in rural and urban areas spend 8 to 11 percent of their income on cigarettes. Higher prices for smoking will force them to quit the habit. The money they save on buying cigarettes can be spent on other daily necessities. Tobacco control in this way may hopefully help poverty alleviation to a certain degree.

The suggestion by experts that the revenue from such tax could be used in smoking control activities such as publicity campaigns or compulsory smoking bans in public venues, is good. This money can also be used to subsidize those low-income residents without adequate health insurance.

As a signatory country of the World Health Organization's Framework Convention on Tobacco Control, we have an obligation to use prices or taxes to reduce tobacco consumption.

With 350 million smokers, the number of people who are actually harmed by tobacco consumption is more than 500 million. There is no reason for second-hand smokers to have their health passively damaged by smokers.

For all these benefits, it is high time that the consumer tax was raised not only by 1 yuan for the time being, but by even more in the future.