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People's Daily Online>>China Business

Smokers may be singed by tax hikes

By Zhou Yan and Shan Juan (China Daily)

12:03, March 10, 2012

China plans to increase taxes on mid- and low-end cigarettes in a bid to curb expanding tobacco consumption in the country, Minister of Health Chen Zhu said on Friday.

The move follows the tax hike targeting high-end cigarettes in 2009, which hasn't met the country's target of easing the rising use of tobacco, Chen said.

"We notice that most of the growing proportion of smokers are young adults, who consume low-end cigarettes and are sensitive to prices. As such, I'm confident that the tax hike will effectively help reduce the number of smokers without affecting fiscal revenue," Chen said on the sidelines of the plenary sessions of the ongoing National People's Congress.

The tax charge is "imperative" given the growing health and environmental concerns arising from smoking, Chen said.

China National Tobacco Corp, the country's State-owned cigarette monopoly, reported an annual net profit of 117.7 billion yuan ($18.6 billion) in 2010. The profit has triggered widespread public criticism of the company's windfall at the cost of Chinese people's health.

China, the world's biggest tobacco producer and consumer, currently has 350 million smokers and more than one million people on the mainland die of smoking-related diseases each year, official statistics showed. That number is expected to rise to two million by 2020.

The mounting health concerns have pushed authorities to raise the levy on cigarettes by 6 to 11 percent in May 2009. But the tax didn't curb cigarette use as some experts expected.

The retail price of cigarettes didn't go up accordingly as the State Tobacco Monopoly Bureau reacted by absorbing the tax hike and maintaining cigarette prices, said Wu Yiqun at the ThinkTank Research Center for Health Development, a non-governmental organization committed to smoking control.

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Leave your comment7 comments

  1. Name

Tracker at 2012-03-13122.107.107.*
I see the CPD mediators are all non smokers and are censoring this topic so I won"t bother reading it again :-)
PD User at 2012-03-13110.175.8.*
Nicotine is a drug. Anyone addicted to nicotine is denying that he/she is in fact a drug addict. It is costly, smelly, dirty and a health hazard habit and the government should ban it outright.
PD User at 2012-03-12183.39.58.*
Don"t agree that at age 18, purchase of "smokes" is lifted; but why NOT at 28 years old when they are more cautious of health and their own immediate family issues and responsibilities! How many know well enough of health and welfare at 18 in China esp. when they are singles, if not most of them are too vulnerable to “smoking-show-off” ? The 2nd invasion of "Opium" comes in disguise as cigarettes and cigars! All Chinese films and CCTV TV programs must omit “heroes and crooks” showing-off in smoking scenes since these are public # 1 bad influences! Tax all poor, mid and high ends of smoking equally by at least 500% more and also TAX all producers, growers and importers of tobacco related stuffs by another 500% more than normal. Then, the bottom line is that CPC must act against law breakers, smugglers and corrupt practises without recourse, absolutely. Who is/are capable of such high end supervision and responsibility with national ethics, pride and love of China?
Yang at 2012-03-12219.233.181.*
This is the best way to convince people to stop smoking. Tax the cigarettes more. Also tax the Cigarette makers more. People do not understand the health issues you can get from smoking. Cancer is number one, number 2 is lung decease. The age to buy cigarettes should be 18 years old. Also to educate the young people in school about the health hazards related to smoking.
PD User at 2012-03-12183.39.43.*
Yes, agreeing with comments below: Even USD20 Billion in revenue is just a drop in the ocean to China at the moment relatively accounting to failed investments abroad & locally whilst >> USD 120 Billion of corrupt funds are still missing from its coffer. Even more scary and worse to China"s future generations shalt be hundreds of millions local folks (* say now with more than 500 million local Chinese smoking coupled with foreigners in China *) with the gravest potential to raise the affected illnesses of various sorts in ordinary folks and environments to a “pandemic effect” and thus, shalt be costing China"s welfare programs to the tune of at least USD2000.00 per sickened person over a life span of liabilities to China (* a hefty USD 2000 x 500,000,000 = how much in USD or Rmb, please? *). Should or shouldn’t any Chinese or CPC be afraid of a complete social welfare chaos & health welfare crisis in China similar to what the USA and EU – PIIGS are undergoing right now or 10 times as bad due to China’s sole huge population over time? CPC must at these 2012 sessions address this smoking issue very seriously because that old Opium War ought to serve as a highest/riskiest signalling warning to political ignorance and/or oversight!

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