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April 30th, 2012:

China’s tobacco excise tax should be almost tripled, WHO says

15/03/2012 11:10:00Simeon Bennett

China should almost triple its excise taxes on tobacco products to
dissuade young people in the nation with the most smokers from taking up
the deadly habit, the World Health Organization said.
The excise tax on tobacco products should be at least 70 percent of the
retail price, the Geneva-based agency said in an e-mailed statement
today. The most-sold brand of cigarettes in China currently has an
excise tax of 26 percent, the WHO said.
China is home to a third of the world’s smokers and more than 1 million
people in the most populous nation die each year from tobacco-related
diseases, according to the statement. Half of China’s 350 million
smokers spend 5 yuan (79 cents) or less for a packet of 20 cigarettes,
the WHO said.
“Increasing prices through taxation has proven to be one of the most
effective ways to discourage people from smoking, particularly young
people,” Michael O’Leary, the WHO’s representative to China, said in the
statement. “Numerous studies, globally and in China, show that a small
increase in the price of tobacco through increased taxation will
significantly reduce the number of smokers and generate considerable
extra revenue for the government,” the WHO said.
Miao Wei, China’s industry minister, said March 11 that the price of
cigarettes in the country is “quite high.” The ability of higher prices
to discourage smoking was yet to be proven, Miao said.

With assistance from Daryl Loo in Beijing. – Bloomberg