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Cigarette tax hike takes effect June 20th

The price of cigarettes will increase by NT$20 (US$0.6) per pack starting on June 20th

The Ministery of Finance announced Thursday that the price of cigarettes will increase by NT$20 (US$0.6) per pack starting on June 20th, after the Legislature passed the third and final reading of an amendment to the Tobacco and Alcohol Tax.

The amendment raises the cigarette tax from NT$590 per 1,000 cigarettes (per kilogram) to NT$1,590, which translates into a tax per packet of NT$31.8, up from the current NT$11.8.

The increase will generate NT$23.3 billion in additional tax revenue per year, which will be used to fund the long-term care program for seniors, according to the Finance Ministry.

Finance Minister Sheu Yu-jer said earlier this year that he believed the policy would also help curb tobacco consumption and promote public health.

Anti-smoking group seeks to raise legal smoking age to 20

Around one billion people will die from tobacco-related causes by the end of the 21st century if current smoking patterns continue…

Taiwan’s anti-smoking group held a press conference on Wednesday calling for higher legal smoking age and completely smoke-free workplaces and indoor public places.

The group has called on the Legislature to revise the nation’s Tobacco Hazards Prevention Act comprehensively to correspond to the requirements of the WHO’s Framework Convention on Tobacco Control (WHO FCTC).

WHO FCTC is the first treaty negotiated under the auspices of the World Health Organization that was developed in response to the globalization of the tobacco epidemic.

Democratic Progressive Party (DPP) legislator Chen Man-Li (陳曼麗) and Kuomintang (KMT) legislator Ko Chih-En (柯志恩) both showed up to the press conference today in support of the group.

Taiwan Heart Foundation’s Chairman Lue Hung-chi (呂鴻基) said today that around one billion people will die from tobacco-related causes by the end of the 21st century if current smoking patterns continue.

Major changes that the group has called for include bans on smoking in all workplaces and indoor public places, increase the size of warnings on tobacco packs to 85% of the surface area and with mandatory plain packaging, bans on sponsorship from tobacco companies, bans on the sale of flavored cigarettes, extend all the smoking-related bans to include e-cigarettes, and raise the legal age for smoking from 18 to 20.

Court upholds NT$5 million fine on British tobacco company

The Taipei High Administrative Court on Thursday upheld a NT$5 million (US$160,800) fine imposed by Taipei City government on a U.K.-based tobacco company.

Imperial Tobacco received the fine in 2015 for violating the Tobacco Hazards Prevention Act, after the company was found to have invited consumers to try out one of its cigarette products, as part of a marketing survey.

Imperial Tobacco filed a case with the Taipei High Administrative Court challenging the fine.

The court on Thursday ruled in favor of Taipei City government, after determining that Imperial Tobacco did indeed violate the provisions of the Tobacco Hazards Prevention Act.

The case can be appealed.

(By Liu Shih-yi and Y.F. Low)

Total smoking, e-cigarette ban in all public places: HPA

HPA announces law to expand ban on smoking to all bars, nightclubs, cigar lounges, including e-cigarettes

The Health Promotion Administration (HPA) announced today a proposed law to expand the recent ban on smoking in public places to bars, nightclubs, cigar lounges, and this will include e-cigarettes with violators subject to a fine of up to NT$10,000 (US$312).

Under the current regulations, smoking is banned in public places. However, there is an exception to this law for hotels, shopping malls, restaurants and other indoor public spaces that have independent air conditioning systems or rooms that have been partitioned for smoking, as well as cigar lounges and bars after 9 p.m.

Lo Su- ying (羅素英), head of the HPA’s Health Education and Tobacco Control Division, told CNA today that the proposed amendment to the Tobacco Hazards Prevention Act to remove smoking rooms will not only apply to bars, nightclubs and cigar lounges, but also electronic cigarettes a will be included, with the devices banned from public areas and not to be sold to those under 18 years of age.

Lo explained that studies have found that designated smoking rooms cannot effectively eliminate the release of second-hand smoke. The WHO Framework Convention on Tobacco Control (FCTC) has found that there is “no safe level of exposure to tobacco smoke,” therefore the government plans to require 100 percent smoke-free environments in all indoor workplaces and indoor public places.

As for e-cigarettes, Lo said the draft of the law states electronic devices that release smoke that contain nicotine, formaldehyde, acetaldehyde, or other substances harmful to human health are to be banned.

Lo pointed out that e-cigarettes are a growing global health hazard and out of fear that minors will be exposed to such products, these devices will be banned in public places and no one will be allowed to advertise or supply electronic cigarettes to people under the age of 18.

The HPA announced that the draft will have a 60-day preview period during which members from all walks of life of the public can put forth their suggestions to the Executive Yuan and the Legislative Yuan to consider. Once the measure passes, smoking of cigarettes and e-cigarettes will be banned in all public places, and violators will be subject to a fine of up to NT$10,000.

On Jan.1 , a complete ban on smoking at bus stops was instituted for 1,150 waiting areas at 932 bus stops in Taipei City, with violators subject to a maximum fine of NT$10,000 (US$314).

Taiwan plans to expand smoking ban to bars, nightclubs

Taiwan is planning to revise regulations to ban smoking in bars, nightclubs and cigar houses, and to restrict electronic cigarettes in the same way as tobacco, officials said Thursday.

The law currently bans smoking at most public places, but permits it at cigar houses as well as bars and nightclubs that are open after 9 p.m. and exclusively to people above the age of 18.

Smoking is also allowed in certain indoor areas of hotels, restaurants and shopping malls that are equipped with separate smoking partitions with independent air-conditioning systems.

But a draft amendment to the Tobacco Hazards Prevention Act, which was announced by the Ministry of Health and Welfare’s Health Promotion Administration on Wednesday, will ban smoking at all of the above places, said Lo Su-ying (羅素英), an official from the administration.

Lo said the amendment follows international trend and is based on findings that indoor partitions cannot effectively prevent second-hand smoke from spreading in the air.

The amendment will also ban e-cigarettes in the same way as tobacco, and make it illegal to provide the smoking alternative to people under the age of 18, with violators subject to a fine of up to NT$10,000 (US$313), Lo said.

Electronic cigarettes have emerged as a new threat to people’s health and could expose minors to cigarettes at an early age, Lo said, adding that the amendment also bans e-cigarette advertisements and sponsorships.

According to statistics released by the Health Promotion Administration, at least 20,000 people in Taiwan die from cigarette- caused illnesses each year.

Over 40 percent of Taiwanese men between the ages of 31 and 50 are smokers, a much higher percentage compared to the 24.9 percent in Singapore, 22.5 percent in Norway, 19.9 percent in Hong Kong and 19 percent in New Zealand, the statistics show.

John Tung Foundation, an organization that focuses on public health issues and tobacco control, said it is glad to see the amendment announced, but urged the government to go a step further and raise penalties for violations.

Yau Seu-wain (姚思遠), a law professor and CEO of the foundation, said tobacco manufacturers and importers are only fined between NT$5 million and NT$25 million for violations, even though their total revenues amount to about NT$160 billion per year.

Yau urged the government to adopt tougher penalties such as suspending the operations of tobacco manufacturers and importers for up to 3 years and doubling their fines to between NT$10 million and NT$50 million, if they were caught three times illegally advertising or promoting tobacco products.

The administration said it will collect opinions from all sides for a period of 60 days, before sending the amendment to the Executive Yuan and Legislative Yuan for review.

The proposed amendment follows a slew of new regulations in Taiwan to tighten smoking control.

Beginning Dec. 26, smoking is forbidden at sidewalks near 267 schools in Taipei, and is also prohibited at all 932 bus stops in Taipei from Jan. 1.

(By Christie Chen and Chang Ming-hsuan)

Tax will spur illicit sales: institute

WHITE-LABEL TOBACCO:Sales of illegal cigarettes are growing among the middle and upper classes due to stagnating income and anxiety over proposed tax hikes

A proposed increase to a tobacco product tax has led to criticism that it would exacerbate an already growing trade in illegal cigarettes.

A joint policy meeting of executive and legislative branch officials on Monday resulted in the drafting of a proposal to raise the cigarette tax by NT$20 (US$0.64) per pack.

The new measure, which is to be finalized by the legislature, is forecast to increase tax revenue by NT$15.8 billion per year, the Executive Yuan said, adding that the government plans to use the money to fund a long-term care program for seniors and the physically challenged.

A pack of cigarettes is currently taxed NT$11.8, plus a NT$20 surcharge.

The Tobacco Institute of the Republic of China on Tuesday expressed concern that increasing the tax would stimulate the trade of illegal tobacco products, adding that the government’s plan ignores the issue and market practices.

It added that the proposed tax deviates from the institute’s advice to the government on a long-term tax plan, which it said should involve reasonable, slowly introduced and predictable tax increases, adding that this is the only way to prevent the spread of illegal tobacco sales, as well as a subsequent loss in tax revenue.

The institute cited research data from the past seven years that showed a high number of illegal tobacco sales that “cause an annual loss to the Treasury of more than NT$1 billion.”

So-called “white label” cigarettes make up the bulk of illegal sales, the institute said, adding that consumption of these cigarettes is on the rise among middle and upper-class consumers.

In particular, there is a steady increase in consumption of white-label cigarettes among consumers in remote parts of eastern Taiwan, as well as in Taipei, it said.

The institute said these consumers are turning to white-label cigarettes due to stagnating incomes, as well as anxiety over proposed tax increases on legal tobacco products.

“The psychological effect of anticipated tax increases is changing the consumer base for white-label cigarettes,” the institute said in a statement, adding that people in the NT$30,000 to NT$40,000 income bracket this year constituted 27 percent of illegal cigarette sales, up from 21 percent last year.

People with low monthly incomes of NT$10,000 or less continue to make up 30 percent of illegal cigarette sales, it said, adding that managers and other professionals made up only 7 percent of white-label consumers in 2013, but now account for 17 percent.

The institute said that while this number is still significantly lower than blue-collar workers’ 58 percent sales contribution, the rapid rise in illegal cigarette consumption among professionals is alarming.

Protests call for tobacco operating license reversal

‘SELLING POISON’:Allowing a Japanese tobacco plant to operate would encourage domestic smoking and turn Taiwan into an export hub for cigarettes, protesters said

The Executive Yuan should revoke the operating license for a massive new Japanese-owned tobacco factory, anti-smoking advocates said yesterday, blasting the government for approving the investment and providing subsidies.

“We do not want Taiwan to become a center for selling poison,” said Taiwan Medical Alliance for the Control of Tobacco founder Wen Chi-pang (溫啟邦), a professor at China Medical University, alongside 20 protesters from the John Tung Foundation and other groups outside the Executive Yuan in Taipei.

The protesters said that the Ministry of Finance should not have issued an operating license to Japan Tobacco International’s new factory in the Tainan Technology Industrial Park.

Japan Tobacco’s NT$9.2 billion (US$290.1 million) investment is reportedly to produce enough cigarettes to cover one-third of local consumption, becoming the nation’s second foreign-owned tobacco factory, following the establishment of an Imperial Tobacco factory in Miaoli County in 2009.

The groups say that the Japan Tobacco factory will encourage domestic smoking, while turning the nation into a base for exporting cigarettes to an export base to Southeast Asia because of favorable government incentives.

“The government says it is bringing in foreign investment, but a lot of the funds are coming out of taxpayers’ pockets,” foundation tobacco control division head Lin Ching-li (林清麗) said, adding that the government should not have granted the factory use of a 7.6-hectare site, as well as utility incentives and property tax exemptions.

Japan Tobacco will be able to use the factory to skirt cigarette tariffs, Lin said.

“Japanese firms plan to turn Taiwan into a huge factory base, but the government was too stupid to foresee this ‘beggar thy neighbor’ behavior,” foundation chief executive officer Yao Shi-yuan (姚思遠) said.

Yao criticized the government for allowing Japanese investment in the tobacco industry using the Arrangement for the Mutual Cooperation on the Liberalization, Promotion and Protection of Investment (投資自由化促進及保護協議) negotiated in 2011.

He said the government could still revoke the company’s license, as long as it provided compensation.

Lin Hsin-ho (林信和), a professor of law at Chinese Culture University, said that allowing the factory to begin operations could oblige the nation to allow similar investment from other nation’s according to the WTO’s most-favored-nation status provisions.

Lin added that the government’s approval breached the spirit of the Statute for Investment by Foreign Nationals (外國人投資條例), which forbids foreign investment in industries that have an adverse effect on public health.

Alliance member advocates raising legal smoking age

The legal age for smoking should be raised and packaging laws changed to discourage young people from smoking, Taiwan Medical Alliance for the Control of Tobacco members said yesterday.

“Many students enter college wanting to demonstrate that they have escaped parental control and they do this by riding motorcycles, getting a girlfriend and smoking — but if the legal age was raised to 21, they would not try it,” said Lee Meng-chih (李孟智), superintendent of the Ministry of Health and Welfare’s Taichung Hospital.

The legal age for purchasing cigarettes is 18.

China Medical University professor Wen Chi-pang (溫啟邦) said that more than 90 percent of smokers become addicted before they are 21, adding that based on the experience of other nations, raising the legal age would push the smoking rate down by about 3 percent over three to five years, with an additional 5 percent drop possible if packaging laws were altered to increase the size of cautionary images so that they cover most of cigarette boxes.

“The pictures on boxes are too timid — they should be much more graphic,” Wen said, calling for packaging changes to compensate for the nation’s relatively low cigarette taxes.

“The average smoker looks at a cigarette box at least 20 times per day, so if you make the images more graphic, it would increase their incentive to quit,” he said. “However, if all a smoker sees is a pregnant stomach, that is not going to have any effect.”

He said that smoking rates are about 30 percent for men and 5 percent for women, with the national rate decreasing by an average of 0.5 percent per year.

Rumored tobacco plan criticized

The nation’s premier anti-smoking lobby, the John Tung Foundation, yesterday said that it is against a rumored Ministry of Health and Welfare policy to increase a surcharge on tobacco products.

The Chinese-language China Times reported that the ministry is mulling a proposal to increase the Health and Welfare Surcharge on Tobacco Products from NT$20 to NT$40 because the Executive Yuan adjusted its distribution of the funds, with the National Health Insurance (NHI) to have NT$6 billion to NT$7 billion (US$182.6 million to US$213.1 million) cut from its budget annually.

The report said the NHI estimated that medical expenses for treating diseases caused by smoking accounts for between 6 and 15 percent of the nation’s total medical expense — about NT$50 billion per year, while the Health Promotion Administration (HPA) estimated an increase in income from NT$30 billion to NT$54 billion if the surcharge is doubled, with smoking rates predicted to drop.

Lin Ching-li (林清麗), head of the foundation’s tobacco control division, said the foundation is against the policy because there is no mechanism to monitor how the ministry allocates the funds it collects.

“Cigarette prices and tax revenue is falling behind [that in other nations], because the tobacco tax has not been adjusted in 28 years,” Lin said.

“The average price of cigarettes should be immediately increased to NT$75 per pack,” Lin said, adding that the price of cigarettes is relatively cheap when compared with other countries.

The foundation believes that an increase in the tobacco tax, rather than the surcharge, would be a better way to effectively discourage smoking, she added.

Separately, former ministers of the department of health Yaung Chih-liang (楊志良) and Yeh Ching-chuan (葉金川) said if the surcharge is to be increased, the funds should not be included in the tax system, but used to protect public health.

Later yesterday, HPA Deputy Director-General Yu Li-hui (游麗惠) said that while a proposal to amend laws regarding tobacco were sent to the Legislative Yuan in May, “actually there is no agenda to amend any tobacco-related law scheduled for discussion in the current legislative session.”

Activists decry tobacco industry incentives

DYING TRADE:A group called on the government to forbid the construction of any more tobacco factories and to close the industry to investment from overseas

Action should be taken to stop foreign firms investing in tobacco factories, activists said yesterday, condemning the Ministry of Economic Affairs for providing economic incentives even as tobacco production in other developed nations has fallen.

The Japan Tobacco International’s (JTI) investment in a new factory in the Tainan Technology Industrial Park comes as the “sun is setting” for the industry in Japan, John Tung Foundation chief executive officer Yao Shi-yuan (姚思遠) said, demanding that the government put the tobacco industry on a list of industries for which foreign investment is forbidden.

John Tung Foundation tobacco control division head Lin Ching-li (林清麗) said that four of Japan’s nine tobacco factories were scheduled to close by the end of the year, with an estimated 1,600 workers losing their jobs.

Because of the prohibitively high cost of producing cigarettes in Japan, the firms are being forced to move production overseas, Lin said.

The incentives the government provides for overseas investors — which include assistance acquiring land and exemptions from property and building taxes — are why Taiwan is seen as a base for expansion, she said.

The foundation called on the Executive Yuan to issue an order forbidding the construction of any more tobacco factories while also placing the industry on a list of industries closed to foreign investment.

It also called for the revocation of JTI’s construction license and the appropriation of Imperial Tobacco’s Miaoli factory, the only other foreign-owned tobacco factory in the nation.