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Time To Raise Tobacco Taxes – And Save Lives

SCMP – Feb 18, 2009

Stocks in companies offering products such as tobacco and alcohol are much loved by investors because they are believed to be recession-proof. Taxmen feel the same way. Tobacco tax is for all seasons; it is one of the few categories of public revenue that can reasonably be raised regardless of the economic cycle. In this downturn, the government is under pressure to bring relief to businesses in its budget next week as industries of all types clamour for tax breaks. The tobacco industry, still with deep pockets, might be the exception.

To deter people from smoking, the government should increase tobacco duty. The Committee on Youth Smoking Prevention yesterday recommended doubling the tax. This is certainly feasible. There is a strong case for a significant increase. Duty on cigarettes has not been raised since 2002. As a result, our city has some of the cheapest cigarettes in the developed world.

Because of the potentially deadly nature of the products it sells, the tobacco industry can expect little opposition from the public to a rise in the tax. Unlike many consumer industries, it finds it much easier to pass on costs to smokers because of their addiction. But high prices would discourage young people from taking up the habit. Smoking can cause addiction and all kinds of chronic diseases. It is imperative youngsters be deterred from taking up the habit.

The ban on smoking in public, introduced at the start of 2007, has proved a success. Businesses, such as restaurants, which initially opposed it have come around. Many find that, though they have lost customers who smoke, non-smokers who previously avoided the establishments have taken their place. Many bars were exempted from complying with the ban until this summer. They are now lobbying for the exemption to continue because of the economic downturn. But they were against the ban even when times were good. The government must make the ban universal, as planned. We cannot completely stop smoking, but raising taxes and extending the smoking ban to all enclosed public spaces will deter enough people from
smoking to save many more lives.

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