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Tobacco Duty In HK To Rise By 50pc

BUDGET 2009 – Regina Leung – 1:52pm, Feb 25, 2009 – SCMP

Financial Secretary John Tsang Chun-wah on Wednesday announced an increase in Hong Kong tobacco duty by 50 per cent “with immediate effect” – saying it was needed for public health reasons.

Mr Tsang was unveiling new fiscal measures in his second budget address in the Legislative Council.

“The duty on cigarettes will increase from around HK$0.8 to about HK$1.2 per stick. We will also continue to step up our efforts on smoking cessation, as well as on publicity and enforcement in tobacco control,” he said.

There had been calls from health experts for the government to consider raising tobacco taxes in an effort to curb smoking-related diseases such as lung cancer.

According to customs statistics, a tobacco tax of 80 cents per cigarette levied in Hong Kong – unchanged since 2001 – makes Hong Kong cigarettes among the cheapest in the developed economies. It is estimated that over 6,000 people die in Hong Kong annually of smoking-related illnesses. Health experts are also concerned about the dangers posed by passive-smoking.

Mr Tsang said although the government’s fiscal position this year was likely to be weak, spending on healthcare would be boosted.

“The government will honour its pledge to increase healthcare expenditure to 17 per cent of recurrent expenditure by 2012,” he said.

“When the financing arrangements are finalised after the consultation on its implementation, we will draw an amount of HK$50 billion from the fiscal reserves to implement the reform” he told the legislators.

Mr Tsang said the government would increase Hospital Authority funding by about HK$870 million a year over the next three financial years.

“The annual subvention for the Hospital Authority by 2011-12 will be approximately HK$2.6 billion higher than now.

“I have also earmarked some HK$840 million for the next three financial years to implement various complementary measures to strengthen primary care services and the support to chronic patients, promote public-private partnership and develop a territory-wide electronic health record system,” he said.

He said the government would provide additional funding of about HK$19 million to enhance the care for people with disabilities.

Mr Tsang said that because of the growing ageing population, healthcare posed the greatest challenge to the public finances.

He said the Food and Health Bureau would continue with the second stage of a public consultation on healthcare reform.

Mr Tsang said more measures to support the development of food testing services were also planned.

“This will help Hong Kong to develop into a food testing hub in the region,” he added.

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