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Tobacco Tax

Rationale of Raising Tobacco Tax

1. Health
- One in two smokers is killed by disease caused by tobacco prematurely. The average loss of life is 10 years or longer;
- Smoking is the single most preventable cause of premature death. World Health Organization estimates that over 5.7 million people are killed by tobacco every year. The number of death in year 2030 will exceed 8 million people.
 
2. Smoking Cessation
- Raising tax on tobacco will induce current smokers to reduce tobacco consumption and quit smoking. According to “Quit to Win” Smoking Cessation Contests conducted by COSH, some of the participants expressed that expensive tobacco products was one of the major reasons to facilitate them quit smoking. COSH’s Tobacco Control Policy-related Survey also found out that the tax increase had made many of those quitted after 2011 more determined to quit.  
 
3. Deter Smoking
- By increasing the retail price of cigarette with tobacco tax, non-smokers will be deterred from taking up smoking, especially children and youth.
 
4. Prevention of Relapse
- Due to nicotine dependence, smokers may go through many attempts of smoking cessation. By increasing the retail price of cigarette with tobacco tax, ex-smokers will be discouraged to relapse into smoking.
 
5. Impacts on Community
- Tobacco is responsible for 7,000 deaths caused by smoking and secondhand smoke;
- Many diseases caused by smoking have brought along heavy burden on medical and health system, such as Cancers, Cardiac Vascular Diseases, Chronic Obstructive Pulmonary Disease, etc., and the annual community cost in Hong Kong is over HK$5 billion.

6. Effective Tobacco Control Strategy
- According to Framework Convention on Tobacco Control (FCTC) of World Health Organization, price and tax measures are an effective and important means of reducing tobacco consumption by various segments of the population, in particular young persons.
- MPOWER denotes for 6 effective tobacco control measures suggested by WHO, in which R refers to Raise Taxes on Tobacco, is one of the most effective tobacco control policies.
- According to the theory of “price elasticity of demand”, World Bank expressed that every 10% increase in the price of a pack of cigarette would result in a 4% decrease in tobacco consumption in high income countries and 8% in medium-low income countries. World Bank also suggested that the tax rate on tobacco should account for 2/3 (67%) to 4/5 (80%) of its retail price.
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