Beijing - China aims to discourage smoking by raising the
taxes on cigarettes and other tobacco products by more than 20 per
cent, state media said Monday.
The tax for a 10-pack carton of cheaper cigarettes costing less
than 70 yuan (10 dollars) will rise from 30 per cent to 36 per cent,
while all wholesale tobacco products will also be subject to a new
value-added tax of 5 per cent, the official Xinhua news agency and
other state media quoted the government as saying.
The tax hike is also designed to 'moderately increase financial
revenue' and improve the taxation mechanism, the agency quoted a
statement by the finance ministry and the state tax administration as
saying.
The tax for luxury brand cigarettes costing more than 70 yuan a
carton will increase from 45 per cent to 56 per cent, while the tax
on cigars will rise from 25 per cent to 36 per cent, it said.
The reports said the cost of the tax hike had still not been
passed on to consumers, despite the government announcing new rates
from May 1.
The joint statement quoted by state media was not available on
Monday on the websites of the Ministry of Finance or the State
Administration of Taxation, while calls to the two ministries went
unanswered.
The China Daily newspaper also quoted the Chinese Association of
Tobacco Control as saying on Sunday in reaction to the tax increases
that such policies were effective and could 'prevent young people
from smoking and encourage more smokers to quit the harmful habit.'
But an official at the association told the German Press Agency
dpa by telephone that its statement was issued in late May.
China has an estimated 350 million smokers among its 1.3 billion
people, with 540 million others affected by passive smoking.
The World Health Organization warned in 2007 that without
government intervention annual deaths from smoking in China could
rise from about 1 million now to 2.2 million by 2020.
Some poor rural areas of China rely heavily on revenue from
tobacco growing and cigarette production, making the government,
which has a state monopoly over the industry, slow to discourage
smoking.
Mao Zhengzhong, an expert in public health at China's Sichuan
University, told China Daily that the new tax increases were not
enough to curb smoking, urging the government to impose a 65-per-cent
tax on retail sales of tobacco.
'The main purpose of this policy is to increase the tax revenue
from cigarettes, not to control smoking in the country,' Mao was
quoted as saying.
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