December 10, 2014 / 8:55 AM / 5 years ago

China plans hike in cigarette taxes, prices to deter smokers

BEIJING (Reuters) - China is considering raising cigarette prices and taxes, a health official said on Wednesday, as the world’s largest tobacco consumer fights to stub out a pervasive habit.

A man flicks ashes from his cigarette over a dustbin in Shanghai January 10, 2014. REUTERS/Aly Song

Smoking is a major health crisis for China, where more than 300 million smokers have made cigarettes part of the social fabric, and millions more are exposed to secondhand smoke.

Campaigners for tougher curbs face hurdles, but reforms of the tax system offer China an opportunity to rein in tobacco use, Yao Hongwen, a spokesman for the National Health and Family Planning Commission, told a news conference.

“Our country is deepening reforms of the tax system,” he said. “We believe this presents a hard-to-come-by historic opportunity to implement a tax hike for tobacco control.”

Yao’s department would work with other agencies to “study and formulate measures” for hikes in cigarette prices and taxes, he added.

“Raising the taxes and prices, in one respect, can reduce spending on tobacco and can lower smoking rates,” Yao said, according to a transcript of his remarks on a government website. “At the same time, it can raise tax revenues.”

Cigarette industry taxes contributed about 7 percent to 10 percent of government tax revenues last year.

The State Council, China’s cabinet, issued a draft regulation last month to ban indoor smoking, limit outdoor smoking and end tobacco advertising.

Several cities have already banned smoking in public places, government offices, hospitals and elsewhere, but the rules are not enforced consistently.

Sources told Reuters in September that intense lobbying by the powerful state tobacco monopoly led to the weakening of controversial legislation that aimed for a total ban on advertising.

More than half of Chinese smokers buy cigarettes at less than 5 yuan, or about 80 U.S. cents, a pack.

The director of the State Tobacco Monopoly Administration took aim at anti-smoking efforts last week, saying they should not take an “absolutist” or “expansionist” direction, as the habit had hundreds of years of history behind it.

Reporting by Megha Rajagopalan; Editing by Clarence Fernandez

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