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Expert: Tobacco tax hike a good first step

Reporter: Hou Na 丨 CCTV.com

06-01-2015 04:58 BJT

China hiked its cigarette tax early this month, and experts say China should further raise the tax on cigarettes to reduce the use of tobacco.

China increased its wholesale tobacco excise tax from 5 to 11 percent in early May, its first increase in six years.

The move has been hailed by experts as an effective means to control tobacco consumption. But some say it is far from enough.

From 2000 to 2012, the price index for cigarettes sold in China rose by 3 percent. Considering the rise in people's income, cigarettes are 70 percent more affordable than before. Experts say that China should raise the tax on cigarettes further to reduce the use of tobacco."

Gregory Yingnian Tsang, a tobacco control specialist, has spent his life fighting for a ban on smoking. He believes the tax should be raised higher and revenues from the tax invested in the health and medical sectors.

"Five percent is a good start but it's not enough. It's just the beginning. Because by raising tobacco taxes, two important functions perform. Number one, it would discourage low-income smokers: students, youth workers and farmers to smoke less. The second is raise overall tobacco revenue as the total package," Tsang said.

The tobacco industry is a major source of tax revenue in China. Last year, it brought in over 900 billion yuan (close to US$145 billion).

The tax hike is expected to bring in an extra 87 billion yuan in revenue for the government this year. But despite the tax, China still faces enormous challenges in fighting smoking.

"There are three other things to be done. Number one is to offer assistance to smokers who quit. We have to classify smoking as a negative chronic disease therefore the expenses can be paid by insurance programs. We have to strengthen the smoking cessation practices so people have place to go. Another one is to add graphic warning signs on top of tobacco packages therefore smokers would discourage from smoking and that it's terrible to send to someone as gifts. Another one is to separate the function of the state tobacco monopoly administration and also Chinese tobacco corporations therefore banning smoking is one thing, promoting smoke sales is something else," Tsang said.

The tobacco tax increase is expected to reduce the number of smokers in China by 4 million. In a country with 300 million smokers, it Is a small first step, but an important one.

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