Health tax on cigarettes to be raised to NT$20

The China Post news staff

TAIPEI, Taiwan — The Cabinet yesterday approved a set of revisions to the tobacco hazard prevention law, raising the health tax on cigarettes to NT$20 from the existing NT$10 per pack and extending “no-smoking” areas to senior high schools, medical institutions, government units and offices for use by three persons or above. Under the revisions, those who are caught smoking in no-smoking areas will be subject to a maximum fine of NT$10,000.

Premier Liu Chao-shiuan said at the weekly Cabinet meeting that the the revisions are designed to be in accordance with “non-smoking environment” regulations set by the World Health Organization (WHO). Liu said the revised law will take effect on Jan. 11, 2009 after it is ratified by the Legislative Yuan. The premier also instructed the Cabinet-level Department of Health to communicate with legislative caucuses of both the ruling Kuomintang and opposition Democratic Progressive Party to come up with effective measures against hoarding and smuggling of tobacco products after the revisions are put into practice. It is expected that tobacco firms will pass the tax hike on to consumers. This, coupled with the ban on smoking in indoor places, according to the anti-smoking John Tung Foundation, may help to reduce the smoking population, especially the young people.

But Lawmaker Chang Shou-wen of the ruling Kuomintang expressed doubts about the justification of the health tax hike. Chang said the move is very likely to fuel smuggling of tobacco products, thus causing the government’s annual tax revenues to shrink by NT$12.6 billion per year. Tobacco dealers opined that the health taxe should be raised step by step, instead of being hiked by NT$10 per pack at one blow.