Article Text

Download PDFPDF
Effects of cigarette tax on cigarette consumption and the Chinese economy
  1. T W Hu1,
  2. Z Mao2
  1. 1University of California at Berkeley, California, USA
  2. 2Sichuan University, Chengdu, China
  1. Correspondence to:
 Professor The-wei Hu, 412 Warren Hall, School of Public Health, University of California, Berkeley, CA 94720, USA;
 thu{at}uclink4.berkeley.edu

Abstract

Objectives: To analyse a policy dilemma in China on public health versus the tobacco economy through additional cigarette tax.

Methods: Using published statistics from 1980 through 1997 to estimate the impact of tobacco production and consumption on government revenue and the entire economy. These estimates relied on the results of estimated price elasticities of the demand for cigarettes in China.

Results: Given the estimated price elasticities (−0.54), by introducing an additional 10% increase in cigarette tax per pack (from the current 40% to 50% tax rate), the central government tax revenue would twice exceed total losses in industry revenue, tobacco farmers' income, and local tax revenue. In addition, between 1.44 and 2.16 million lives would be saved by this tax increase.

Conclusions: Additional taxation on cigarettes in China would be a desirable public policy for the Chinese government to consider.

  • taxation
  • Chinese economy

Statistics from Altmetric.com

Request Permissions

If you wish to reuse any or all of this article please use the link below which will take you to the Copyright Clearance Center’s RightsLink service. You will be able to get a quick price and instant permission to reuse the content in many different ways.

Footnotes