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The tobacco industry claims that increases in tobacco tax will not discourage people from smoking because smokers will simply substitute taxed cigarettes with smuggled untaxed cigarettes.1 The experience in Hong Kong suggests that smuggled cigarettes are eating into some of the taxed cigarette market share, as the industry suggests. However, despite this increase in the illicit market, higher tobacco tax does effectively reduce total tobacco consumption.
The tobacco duties of Hong Kong on is governed by the Dutiable Commodities Ordinance with just few exceptional circumstance.2 ,3 The analysis below is based on data obtained between 2009 and 2010, and examines the impact of the first increase in tobacco tax in Hong Kong in 8 years.4
Table 1 provides cigarette duties,5 duty …
Footnotes
Correction notice This article has been updated since it was published Online First. Reference 1 has been updated as the original source is no longer available. The first sentence of the second paragraph “Hong Kong is an ideal place to test the impact of increasing cigarette duties on smuggling as it does not have any domestic tobacco manufacturing and there are few exemptions for duty on cigarettes” has been changed to: “The tobacco duties of Hong Kong on is governed by the Dutiable Commodities Ordinance with just few exceptional circumstance”. Reference 2 has been added.
Competing interests None declared.
Provenance and peer review Not commissioned; externally peer reviewed.