Concern group advocates for tobacco tax freeze and calls for long-term smoking control strategy

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20th February 2024 – (Hong Kong) As the Hong Kong government prepares to unveil its latest budget, the discourse around tobacco taxation has reached a boiling point. The Hong Kong Council on Smoking and Health has recently advocated for an increase in tobacco taxes to align with the World Health Organisation’s (WHO) recommendation that excise taxes account for at least 75% of the retail price. However, this suggestion faces staunch opposition from the Long-Term Tobacco Policy Concern Group, which argues that such measures could exacerbate the proliferation of the illicit cigarette market.

The Concern Group has highlighted the spike in illegal tobacco sales following the government’s previous tax hike in February last year. They assert that the WHO’s advice is a general guideline rather than a specific mandate for Hong Kong and emphasize that reducing the smoking population is the true key performance indicator for tobacco control. They argue that to blindly chase the WHO’s recommendation without considering local circumstances risks undermining the effectiveness of tobacco control by driving smokers towards the black market.

The imminent release of the Thematic Household Survey by the Census and Statistics Department, which is conducted biennially, will provide updated figures on smoking prevalence in Hong Kong. These findings, along with results from the earlier ‘Public Consultation on Tobacco Control Strategies’ conducted by the Health Bureau, are awaited in the coming months. The Concern Group suggests that the government should freeze tobacco taxes in the upcoming budget, pending a thorough review of the effects of last year’s tax increase and the integration of public feedback into a comprehensive long-term strategy for tobacco control.

In a move to gauge smoker sentiment, the Concern Group set up eight ‘cigarette butt voting boxes’ across districts last week, yielding nearly a thousand responses. The majority of smokers indicated that further tax hikes would not aid them in quitting smoking. Furthermore, approximately 70% said they had encountered cigarettes sold for less than HK$50 per pack, suggesting a rise in cheaper, likely illegal, tobacco products.

Joe Lo Kai-lut, the convener of the Long-Term Tobacco Policy Concern Group, believes these ‘voting results’ contest the notion that increasing tobacco taxes effectively boosts smokers’ willingness to quit. He reiterated that the widespread availability of illicit cigarettes necessitates caution against policies that might inadvertently fuel the black market.

The WHO’s 2021 report shows that less than 40 out of over 190 countries meet the suggested 75% tobacco tax threshold, with these countries exhibiting varying smoking rates. This suggests no direct correlation between high tobacco tax ratios and low smoking prevalence. Lo points out that the WHO’s guidelines are not tailor-made for Hong Kong and that regional coordination is crucial to avoid cross-border smuggling.

Since last year’s substantial 31% tax increase on tobacco, the retail price per pack of cigarettes in Hong Kong has soared to nearly eighty Hong Kong dollars. If taxes rise to nearly HK$100 per pack as proposed, prices could leap to between HK$120 and HK$130, making them five to six times more expensive than in mainland China. With frequent cross-border transportation and a surge in northbound consumption, the ‘75% tax ratio’ is not practical for Hong Kong and should not be pursued without considering local dynamics.

The Census and Statistics Department is set to release the latest smoking-related findings from its Thematic Household Survey within the first half of the year, alongside conclusions from the Health Bureau’s public consultation. The Concern Group urges the government to hold off on any further tobacco tax increases in the upcoming budget until these insights are analyzed, and an informed, comprehensive, long-term tobacco control strategy is developed.