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February 25th, 2009:

50% Tobacco Tax Increase

Media Release

Clear the Air (CTA), together with the Department of Community Medicine, University of Hong Kong (HKU) and Dr Judith Mackay of the World Lung Foundation (WLF) have actively lobbied the Department of Health, the Panel on Health Services, the Food and Health Bureau, Legco members, the Financial Secretary and the local media to show that Hong Kong Government’s anti smoking measures were seriously lacking and in breach of the requirements of the WHO’s Framework Convention on Tobacco Control Treaty. There has been no tobacco tax increase in Hong Kong for 8 long years since early 2001.

Recently the South China Morning Post published information on their front page provided by us demonstrating that the number of legal tobacco products consumed in 2008 was 13.8% more than consumed here in pre – smoking ban 2006. In the past week ATV World’s ‘Inside Story’ program aired a well timed documentary in which Clear the Air , HKU and WLF figured prominently; all the above strategies, combined with nonstop up to date worldwide anti-tobacco information provided to the Secretary of Health , the Food and Health Bureau and Legco members has now resulted in a significant step forward by the local SAR Administration which hopefully sets an example to Mainland China. In addition, the Secretary of Health Dr. York Chow and the Food and Health Bureau have demonstrated to the Administration the importance of increased taxation as an important healthcare measure and they have refused to compromise on this important matter.

50% Tobacco Tax Increase – 烟草税增加50%

The Financial Secretary today announced that the excise duty on tobacco products will be immediately increased by 50% to HK$ 24 per pack above the current levels of just over HK$ 16 per pack.

Whilst we have sought a 100% tax increase, Clear the Air estimates that the new increased tax will hopefully:

– Reduce current adult smoking significantly

– Reduce current youth smoking by a significant amount and prevent our non smoking youth starting their addiction due to peer pressure

The Hong Kong Administration must now capitalize on this tax increase and move towards making Hong Kong the world’s leading non smoking territory.



– 令成年烟民的數目明顯減少

– 令青少年烟民的數目明顯減少,從而防止青少年因受朋輩壓力去開始吸烟


Further Government action is needed

The tobacco taxation level must continue to increase year by year in line with FCTC requirements.

Smoking bans must be extended at all restaurant and bar premises to include the Outside Seating Accommodation and patio areas.

Smoking must be banned near airport and ferry entrance and exit doors, within 20 meters of restaurants, bars , building and office entrances , in vehicles carrying children and in all transport interchanges whether open air or enclosed.

The Tobacco Control Office staff needs to be doubled in order to enforce the new fixed penalty smoking offence scheme efficiently.

The Government must also legislate the excise taxation to be a percentage not less than 80% of final retail cost to prevent tobacco companies reducing prices to offset the increased taxation.

This new excise taxation level is reasonably expected to earn approximately HK$ 4.6 billion duties in the coming financial year but this will still trail Government’s healthcare current spending on tobacco related illnesses and lack of productivity by HK$ 0.8 billion ; this is unacceptable since the health damage due to smoking is totally preventable by fiscal means, especially to prevent youth from starting smoking and health damage by passive smoking.

The Government must now consider legal action against the tobacco companies as has happened successfully overseas, to recoup the immense costs incurred on the local healthcare system by these consumer products.

Tobacco products are the only ‘legal’ consumer products which kill their users when operated as directed by the product manufacturers.

Text of the Budget speech on Tobacco Tax:

Medical and Health

108. Separately, for public health reasons, I propose to increase tobacco duty by 50 per cent with immediate effect. The duty on cigarettes will increase from around $0.8 to about $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.

Non competing Interests :

None of the above bodies nor individuals (CTA, HKU, WLF) has any links whatsoever to the Tobacco Industry unlike statements which recently appeared in the press from the Committee on Youth Smoking Prevention. For those people who are not aware of the history or tobacco company funding of this organization please refer to the Council on Smoking and Health website:


Clear the Air is a registered charity based in Hong Kong with the aims of improving the overall air quality in the Territory. For further information on this press release please contact :

Mr Michael Pieper, Communications Director Clear the Air Hong Kong

Professor Anthony Hedley , Department of Community Medicine University of Hong Kong

Professor Judith Mackay , World Lung Foundation

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.

Three Jailed For Cigarette Smuggling

Loretta Fong – Feb 25, 2009 – SCMP

The former chairman of Hong Kong-based Nanyang Brothers Tobacco Co and two employees from another company were jailed yesterday for pocketing commissions and smuggling cigarettes to the mainland.

Nanyang Brothers, a subsidiary of publicly listed Shanghai Industrial Holdings, made the Double Happiness brand of cigarettes, the brand smuggled to the mainland.

In the District Court, Lu Dayong, 60, who has fled the city, was sentenced to 4-1/2 years in jail, and his lover, Ko Kit, 40, was jailed for 3-1/2 years. Ko was director of Hang Chun Trade Development.

The pair was found guilty of a joint charge of conspiracy to accept an advantage from a cigarette trader, Golden Leaf International Development. They received more than HK$7.5 million.

Chan Kai-san, 41, a Hang Chun sales manager, who was convicted of a count of conspiracy to defraud Nanyang Brothers, was jailed for two years.

In sentencing, Judge Joseph Yau Chi-lap said “corruption struck at the heart of commercial and public life”.

He said Hong Kong had become one of the most corruption-free places in the world, and unscrupulous individuals would not be allowed to ruin the hard work of officials over the past 35 years by offering or accepting bribes.

The court had heard that the offences happened between December 2002 and February 2004. The trio were caught on covert surveillance discussing the cigarette shipments or commission payments. Anti-graft agents found Lu kept a diary of the transactions.

In sentencing Ko, Judge Yau rejected the claim of her defence counsel, Joseph Tse Wah-yuen, who argued she did not benefit from the payments.

Judge Yau said that Lu, as the former chairman of Nanyang Brothers, seriously breached his fiduciary duty by defrauding the company. He said the amount of cigarettes smuggled was substantial because evidence showed there was a price war over cigarettes due to oversupply in Guangdong.

Judge Yau said the scheme was well-planned and highly sophisticated, which added gravity to the offence.

Prevent Officials Accepting Cigarette Bribes

Lawmakers draft rules to prevent officials accepting cigarette ‘bribes’

Shi Jiangtao in Beijing – Updated on Feb 25, 2009

Mainland legislators are drafting bills to ban government officials from buying cigarettes using public funds or accepting them as gifts.

The legislators said tobacco consumption had led to an increase in rampant corruption, state media reported.

They were also likely to propose an increase in tobacco tax and a separation of the State Tobacco Monopoly Administration and large tobacco companies, Xinhua quoted mainland health activists as saying.

Analysts said if the bills were passed, it would be the first time on the mainland that accepting cigarettes would amount to taking bribes.

As part of the anti-smoking campaign which has gathered pace in recent months, the Ministry of Health’s National Tobacco Control Office and several non-governmental organisations have worked with deputies to the National People’s Congress and the Chinese People’s Political Consultative Conference, who gather for their annual meetings next week.

Although Beijing signed the Framework Convention on Tobacco Control, a World Health Organisation treaty, in 2003, activists said it had made little effort to implement it or provide adequate support for tobacco controls.

This is not the first time that health activists and legislators have joined forces in pushing for tougher tobacco controls. A similar bill was proposed by an NPC deputy in 2007 calling for government attention to the health hazards of smoking and for a ban on using public funds to refund cigarette costs.

But Wu Yiqun, executive vice-director of the Research Centre for Health Development, said the bills proposed this year had made the most specific reference yet to the links between cigarette smoking and combating corruption.

“We have to make repeated efforts to push forward the difficult campaign which very much depends on the government policy,” Professor Wu said. “No one expects big breakthroughs through one single bill, but the bills this year have a better opportunity because of enormous public support for a healthy environment and anti-corruption attempts.”

The monopoly of the tobacco industry, and expensive cigarettes, were sources of huge waste and graft, the agency and campaigners said.

Zhou Jiugeng, a district housing chief in Nanjing, was sacked and placed under investigation last year after being found wearing a watch worth about 100,000 yuan (HK$113,580) and smoking cigarettes selling for 1,500 yuan a carton.

Anti-smoking activists say government funds for cigarettes in Jianli and Honghu counties in Hubei stand at as much as 10 million yuan a year.

The proposed bills would cover all government agencies, state-owned enterprises and the military. Officials who accepted cigarettes as gifts would be charged with taking bribes, and subject to criminal punishment.

Tobacco office director Yang Gonghuan told Xinhua there were over 300 million cigarette smokers in the country, with 1 million dying of tobacco-related illnesses such as lung and throat cancer and heart disease each year.

“It’s high time for NPC and CPPCC delegates to appeal to the government and the public to get involved in tobacco controls,” Dr Yang said.

High Tax Rise Will Not Work

Updated on Feb 25, 2009 – SCMP

I agree that increasing the tax on tobacco can curb youth smoking.

This claim has been made by the World Health Organisation and the World Bank.

However, I do wonder why the Committee on Youth Smoking Prevention has proposed exactly doubling the tax (“Call for doubling of tobacco tax to stop young lighting up”, February 18). Of course, if the increase in tax is too small, it will not act as an effective deterrent. Likewise, if it was too high an increase, it might be counter-productive.

High prices will undoubtedly discourage young people from buying cigarettes on which duty is paid. Instead, they might be tempted to buy cheaper, illegal cigarettes smuggled from the mainland. This will only help the triads, while poor cigarettes will only pose an ever greater health risk. More research is needed before deciding by how much to raise the tax.

Wong Pui-lam, Kwun Tong