South China Morning Post — 29th April 2011
|Fewer people are buying cigarettes and more are trying to quit since the government increased the tobacco tax by 41.5 per cent in February, while a previous rise caused a dramatic reduction in youth smoking, new statistics and university studies show.
Retailers say cigarette sales plunged by almost 40 per cent immediately after the increase was announced in this year’s budget.
This comes as lawmakers seek to revoke the order giving effect to the increase, saying it will hurt low-paid workers who cannot quit.
A 7-Eleven shop manager said tobacco sales had dropped by nearly 40 per cent since the announcement.
Before the tax rise, his outlet sold about 400 packs of cigarettes a day. This fell to 170 packs immediately after the budget, and although sales had risen since, his outlet still sold just 250 packs a day.
This was in line with the number of people who tried to give up. A total of 4,151 people have called the Department of Health’s quit line since March, which was 2.6 times more than in the same period last year.
And in February and March, some 634 people enrolled in quit-smoking programmes at the clinics of the department and the Tung Wah Group of Hospitals, 2.2 times more than in the same period last year.
“Some lawmakers always say raising tax significantly will hurt the grass roots, but in fact minor increases won’t be effective in pushing people to quit,” Council on Smoking and Health chairwoman Lisa Lau Man-man said.
In further evidence of the effectiveness of tax rises, a University of Hong Kong study found the 50 per cent increase in 2009 was the main reason the youth smoking rate fell 51 per cent from 2008 to last year.
Researchers surveyed 53,504 pupils from Form One to Form Five, and found that 3.4 per cent smoked. This was down from 4.8 per cent last year, which was itself a 43 per cent drop from 6.9 per cent in 2008.
School of public health assistant professor Daniel Ho Sai-yin, who carried out the survey, estimated that the 2009 tax rise had prevented 13,452 young people from taking up smoking, saving half of them from premature deaths.
Another study found 56 per cent of young people who called the university’s quit line were motivated by the tax rise. Of these, half had been able to kick the habit.
Ho said young people were the main target of tobacco companies’ efforts to expand their customer base, and they were the most price-sensitive. As two-thirds of the city’s smokers took up the habit in their teens, Ho said stopping young people from smoking was essential to reduce future tobacco-related deaths.
Meanwhile, a proposal by two lawmakers to repeal the public revenue protection order – which gave a provisional legal basis for the 41.5 per cent tax rise – seems likely to fall short of the votes needed to pass.
Lawmakers Albert Chan Wai-yip, of People Power, and Vincent Fang Kang, of the Liberal Party, will seek to repeal the tax increase at a Legislative Council meeting on Wednesday. But major parties, including the Democratic Alliance for the Betterment and Progress of Hong Kong and the Civic Party, will oppose the attempt. The Federation of Trade Unions will also vote in favour of the order, despite its opposition to the tax increase.
“Blocking the order will create administrative troubles, as the government will need to refund the tax it has already collected,” federation lawmaker Wong Kwok-kin said.
DAB lawmaker Wong Ting-kwong, an opponent of the tax rise, said he would go on urging the government to concede. “We believe that even if the order is passed, the government will make a concession if we can line up enough opposition.”
The director of Hong Kong University’s school of public health, Professor Lam Tai-hing, said that if legislators overturned the increase, it would send “a very wrong message” to young people. “They would think that even the honourable lawmakers are encouraging people to smoke.”
Some lawmakers say increasing the tax will push more people to buy illicit cigarettes, but Lam said the illicit trade had always existed regardless of the tax.
“What the lawmakers are doing is to reverse something that has already been established,” he said. “If they succeed, cigarettes would suddenly become much cheaper. When price decreases, demand will certainly shoot up. And when that happens, do you think the illicit traders will back off and step out of the game?”