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People's Daily Online>>China Business

Smokers may be singed by tax hikes (2)

By Zhou Yan and Shan Juan (China Daily)

12:05, March 10, 2012

"Thereafter it had little effect curbing the smoking epidemic," she said, calling for increased prices of cigarettes after the tax hike.

In this regard, whether the coming tax hike would really make smokers quit remains a big question, said Yang Gonghuang, director of the Tobacco Control Office under the Chinese Center for Disease Control and Prevention.

According to her, taxation policies in China are determined by the Ministry of Finance but pricing of tobacco products is largely under the control of the State Tobacco Monopoly Bureau, which also owns China National Tobacco Corporation.

"Only when retail cigarette prices go up along with a raised levy on cigarettes could the number of smokers be affected," she explained.

International studies have found that when tobacco prices rise by 1 percent, the number of smokers dwindles by about 0.4 percent.

In China, about half of the smokers consume low-end cigarettes priced below 5 yuan, according to a 2011 survey by the Chinese Center for Disease Control and Prevention.

"The key to cut the number of smokers and curb smoking is to both raise taxes and retail prices of mid- and low-end cigarettes," she said.

Since most of the expensive cigarettes are given as gifts, price hikes don't work well in deterring such purchases, said Wu.

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