Gov¡¯t to raise tobacco tax for a cut in tobacco consumption

The government has decided to consider raising the price of cigarettes through a hike in the tobacco tax.

Noting that the Ministry of Finance and Economy (MOFE) is seriously considering hiking the tobacco tax as a means of reducing tobacco consumption, a MOFE official said that the ministry plans to have relevant consultations with the ministries of Government Administration-Home Affairs and Health-Welfare on the matter. The proposed hike would apply to the Tobacco Consumption Tax, a provincial tax.

The plan is a follow-up to President Kim Dae-Jung`s instruction Wednesday to consider reforming the tobacco-related tax system. His proposal was contained is report produced by the Ministry of Health and Welfare.

Pointing out that the current trend is to abolish special consumption taxes, the official said that the imposition of the tax on the tobacco was not proper and the possibility of raising the tobacco consumption tax was high.

Fearing a possible public backlash against the tax hike, the MOFE has decided to seek ways to use the money gained through the tax hike to promote the people¡¯s health. The ministry anticipates that the increase in tax revenues would not be significant, as the tobacco tax hike would result in a reduction in tobacco consumption.