Tax hike on tobacco creates market for illicit cigarettes

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HKUAIT opposed to tax hike on tobacco, saying it will create a market for illicit cigarettes. (From the right) Ms Luisa Tam, Executive Director of HKUAIT, and Mr Jeff Herbert, Advisor of HKUAIT.

 

Hong Kong United Against Illicit Tobacco (HKUAIT) released results to a public survey yesterday, showing 9 out of 10 respondents consider black market cigarettes as a problem for Hong Kong. Such a figure saw a 10% increase compared to survey results last year. The group urged the Government to step up its efforts to crack down on illicit tobacco on the streets.

 

Their fear that illicit tobacco is running wild in Hong Kong is not unfounded. In a report published by Oxford Economics last year, it was revealed that Hong Kong’s illicit cigarettes consumption was at a staggering 33.6% of all cigarettes consumed in the city, meaning 1 out of 3 cigarettes is a black market cigarette.

 

HKUAIT’s Advisor Jeff Herbert considers the huge price difference between legitimate cigarettes and illicit cigarettes as the crux of the problem and it will likely be exacerbated by the recent call of the Council of Smoke and Health to increase the levy on tobacco by 100% which will only make the illicit cigarettes more tempting to smokers. Mr Herbert believes there should not be a tax hike on cigarettes before the Government eliminates illicit tobacco on the street.

 

A former Senior Superintendent with the Police, Mr Herbert speculates that the Police was “distracted by the much bigger problem” which was the Occupy Movement last fall but he was encouraged to see the overall crime rate dropped during the period. However, he believes, “because the Police has been drawn up for the Occupy [Movement], it made it easier for the illegal salesman to move around.”