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UPDATED: February 10, 2009 NO. 6 FEB. 12, 2009
Can Raising the Tobacco Tax Reduce the Number of Smokers?
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Tobacco companies are against tobacco control efforts for fear that once the efforts succeed, their economic interests will be affected. For years, the global tobacco control movement has been unable to make any headway and it is largely due to the lack of funds needed to prevent tobacco manufacturers' anti-control propaganda. If only a small fraction of the tobacco tax revenue is spent on further tobacco control activities, the achievements will be significant.

Nailing the poor

Chen Qinggui (www.dahe.cn): Health experts' studies reveal that tobacco consumption accounts for 8-11 percent of low-income families' expenditures on average. The illusion that tax increases will greatly reduce the number of smokers is based on the precondition that this policy will curb smoking. If not, the raised tobacco taxes can only hurt poor smokers more.

Smoking is also a citizen's right. So it's unfair to deprive the poor of cigarettes by making tobacco unaffordable.

China signed the World Health Organization's Framework Convention on Tobacco Control in 2003. In accordance with the convention, signatories should implement tax policies and, where appropriate, price policies on tobacco products so as to contribute to the health objectives aimed at reducing tobacco consumption. But at the same time, the convention also recommends non-price measures such as protection from exposure to tobacco smoke and a comprehensive ban on tobacco advertising, promotion and sponsorship. Therefore, raising cigarette taxes is only one way, and there must be strict anti-smoking laws and regulations and help for smokers who want to kick the habit. It is unacceptable if the government only raises cigarette taxes but does not implement other measures.

Lin Jinfang (www.china.com.cn): Tobacco is addictive and therefore a kind of drug. So it stands to reason that addicts will not give up their fix just because of higher prices.

The tobacco industry is still a major source of the government's fiscal revenues. It is supporting millions of tobacco farmers and creating a large number of jobs in the process of tobacco production and circulation. In some regions, tobacco is even a pillar industry. Therefore, when it comes to tobacco control, many local governments are faced with a dilemma. When more and more revenues are coming from cigarette taxes, they will be much less interested in tobacco control.

Yang Jinxi (www.ycwb.com): According to experts' studies, raising the cigarette tax rate to 51 percent of retail price will help to reduce the number of smokers by 13.7 million. This calculation seems questionable. Smoking is harmful to people's health, but as a habit or a hobby, everyone is entitled to enjoy it. If the government wants to curb smoking by making cigarettes unaffordable to some people, this is a kind of discrimination against the poor and it's unfair.

A lot of work need to be done before we turn to cigarette taxes for help. For example, a smoking ban in public places is not well implemented in many regions, so it's important to take effective measures to correct this. Besides, although tobacco advertising is banned, tobacco companies can always find some ways to promote their products. The public has long called for warning labels on cigarette packages, but manufacturers take no heed. If all this work is implemented and people's awareness of the harm of smoking is strengthened, we can surely get somewhere in curbing tobacco consumption.

Zhao Guangrun (guancha.gmw.cn): If tobacco taxes are sharply raised, the biggest beneficiary will be the government, whose annual revenues will increase by 64.9 billion yuan. But it's hard to say to what extent higher taxes can help to improve smokers' health and save lives.

Smokers of high-grade cigarettes are generally have strong purchasing power. Therefore, higher cigarette taxes will do little to discourage this group from smoking. As for those who buy low-grade cigarettes with their own money, most of them belong to the low-income category. They earn little and their financial situation has been worsened by the global financial turmoil. They will naturally choose cigarette smoking as a way to evade the miseries of daily life. Although they know smoking will harm their health, they need an outlet to calm their nerves. Isn't it just plain cruel to increase the tax burden on these people?

The global economy has now slipped into a downturn, and many people's income is being stretched. Given this situation, economists in many countries are suggesting their governments return more money to the people. I do not understand why Chinese economists always urge the government to raise taxes and increase the burden on the people. Is it that these so-called economists do not understand this economic logic, or don't they care about the people's interests at all?

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