The Tax Burden Of China'S Tobacco Industry Is Far Lower Than That Of Other Tobacco Giants &Nbsp.

Raising tobacco duty is a reduction.

In 2003, China signed the WHO Framework Convention on tobacco control and ratified the Convention in 2005.

The Framework Convention on tobacco control is the first public health treaty in the world.

The parties to the Convention undertake to give priority to their right to protect public health.

Article sixth of the Convention stipulates that parties should consider implementing price and tax measures to reduce tobacco consumption.

At present, tobacco control in China, including smoking ban in public places and propaganda and smoking knowledge and skills, are all "non price measures", mainly implemented by the health sector.

Internationally, the main means of smoking cessation is to reduce tobacco industry profits and smokers' desire to buy cigarettes by raising tobacco tax rates and prices.

The overall tax burden of China's tobacco industry is far lower than that of other tobacco giants in the world.

Germany was 70%, Brazil was 74%, Britain was 80%.

According to Professor Hu Dewei, China's cigarette tariff adjustment last year only involved the allocation price and wholesale price of cigarettes. Manufacturers and wholesalers did not pfer the increased tax to smokers and did not raise the retail price. That is to say, the tax increase would have no real impact on the consumption of Chinese cigarettes.

However, if the manufacturer / wholesaler pfers the effect of the tax increase to the consumers, when the retail price of cigarettes increases by 3.4 percentage points, the cigarette consumption will be reduced by 545 million packages (the total cigarette consumption is 1 trillion and 700 billion packs) under the assumption that the price elasticity of cigarettes is -0.15 (conservative estimate).

And China has 300 million of smokers now. It can be estimated that 3.4 percentage points will raise 1 million smokers to quit smoking, and will make 250 thousand quit smokers free from tobacco related diseases.

"In the long run, China should consider raising the total tax rate to more than 60% of the retail price."

Hu Dewei said that the low price of Chinese tobacco products is one of the reasons for the high smoking rate.

And increasing tobacco taxes to raise the price of cigarettes is a win-win tobacco control policy, which not only protects citizens' health, saves lives, but also increases government revenue.

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China is the largest tobacco producing and consuming country in the world.

Tobacco use causes huge economic burden to Chinese society every year. About 1 million people die from tobacco related diseases every year. The number of deaths is expected to increase to 2 million by 2020.

According to statistics in 2008, China's direct cost of tobacco related diseases has accounted for 3% of the total health expenditure.

Raising the retail price of cigarettes will hurt the interests of the poor. Hu Dewei believes that the study of different income groups shows that the result of raising the retail price of cigarettes may make more low-income people reduce smoking consumption and increase other important investments such as education, housing and so on. This is a good thing, not a bad thing.