Make cigarettes less affordable

Cigarette prices are a key concern of the 350 million smokers in China. Spoiled by cheap cigarette prices, Chinese smokers consume more than one third of the cigarettes produced in the world every year. For long, health experts and tobacco control workers have advocated levying heavier tax on cigarettes and other tobacco products to curb smoking that results in annual direct losses of 140 to 160 billion yuan ($20.6-23.5 billion) to China.

Raising the tax on tobacco and consequently making cigarettes more expensive is an effective measure to curb smoking. Higher cigarette prices may push some smokers to quit smoking and squeeze the amount of cigarette consumption of the ones who go on smoking. High cigarette tax is especially efficacious in reducing smokers among the young and the poor, because they are the most sensitive to prices.

In May, the Ministry of Finance and the State Administration of Taxation announced a hike in cigarette tax, the first since 2001. Hu Dewei, chief health economist at China Health Economics Institute under the Ministry of Health, and Mao Zhengzhong, professor at Sichuan University, explained the tax hike in details: for Class A cigarettes, the tax rose from 45 to 56 percent; and for Class B, the tax rose from 30 to 36 percent; the tax on cigars increased from 25 percent to 36 percent. However, the threshold between Class A and B is raised from 5 yuan per packet to 7 yuan, making the tax on cigarettes priced between 5 and 7 yuan per package lower. Besides, the tax increase on cheap cigarettes, which account for a half of total consumption, is still too modest.