Price of Cigarettes Is to Rise Again

The price of cigarettes is expected to rise again by 120-180 won per pack next month. An official of the Ministry of Finance and Economy said yesterday that ``the government-ruling party consented to increase the `health promotion fund`, that is a quasi-tax on cigarettes, to make up the heath insurance deficit. The government will confirm and announce the plan on the cigarettes price raise this month.`` This government official said that ``although the increasing rate has not been confirmed yet, a proposal to increase the `heath promotion fund` from 2 won per pack to 100 won or 150 won. In this case, the actual price of cigarettes, including the surtax, will rise by 120 won - 180 won per pack.``

Assemblyperson, Lee Hae-Chan of the Millennium Democratic Party said Saturday that ``in order to make up the 50 percent of the health insurance finance with the national subsidy, the related ministries are consulting one another to provide 40 percent from the national budget and 10 percent from the `health promotion fund`. 150 won on average per pack will be levied. The government and the ruling party are examining several options to increase the price of cigarettes; revision of the cigarettes business law that allows the `health promotion fund` up to 20 won per pack; revision of the public health promotion law; legislation of a special law to keep the health insurance finance balanced. As the government-ruling party decide to increase the price of cigarettes to make up for the health insurance deficit, it is anticipated that the cigarettes price rise will be burdensome to the already soaring prices. The price of cigarettes was increased by 148 won on average per pack in January.

Park Joong-Hyun sanjuck@donga.com