Table 3

The impact of cigarette tax increases on tobacco-attributable mortality and government tax revenue using different price elasticities

2007 levelsRecent tax adjustmentIncrease in specific excise tax of additional 1 RMB
Increase in cigarette tax per pack (RMB)
Cigarette retail price (RMB/pack)6.646.877.87
Producer price3.983.983.98
Tax per pack2.662.893.89
Total tax as % of retail price40%43.4%50.6%
Reduction in cigarette consumption (billion packs)
Reduction in number of smokers (millions)
Price elasticities†
Number of lives saved (millions)‡
Prevalence of adult (aged 15+) current smokers (millions)31%
Total number of current smokers (millions)308.0
Additional total tax revenues (billions RMB)
Total annual cigarette tax revenue (in US$)§
  • * Price elasticity.

  • Smoking participation elasticity=40% of the total price elasticity; smoking intensity elasticity=60% of the total price elasticity.

  • Assuming one-third reduction in smokers.13

  • § US$1=7.5 RMB for the 2007 exchange rate.