Call for a Minimum 75 percent Tobacco Tax Increase to Motivate Smoking Cessation

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Hong Kong Council on Smoking and Health (COSH) urges the Hong Kong Government to increase the tobacco tax by at least 75 percent in the 2024-25 Budget and as such the levy will account for 75 percent of the retail price of cigarettes, in line with WHO’s recommendation. This move is vital as the Government aims to reduce smoking prevalence to 7.8 percent by 2025. Globally, raising the tobacco tax is recognised as the most effective measure to reduce smoking.

Raising tobacco tax by 75 percent will make the cigarette retail price to about HK$115 per pack, a potential tipping point for many smokers to consider cessation. COSH also advocates for an automatic tax increase mechanism for future annual tax hikes, adjusted to counteract the effects of inflation and income growth, and avoid the tax’s proportion in the overall retail price of cigarettes being decreased likely by tobacco industry’s price hikes.
In the 2023 Policy Address, the Chief Executive of HKSAR proposed launching the next phase of tobacco control initiatives in 2024. Mr Henry TONG Sau-chai, COSH Chairman, noted “The smoking prevalence in Hong Kong was 9.5 percent in 2021.The Government must act swiftly and effectively to reduce the number of smokers by over 100,000 to achieve this target in less than two years. It is imperative to expeditiously initiate the tobacco control measures comprehensively.”

Mr Tong added that compared to other tobacco control measures, raising the tobacco tax requires the least implementation costs and enforcement resources, and the shortest time for legislation and implementation, while delivering the quickest and most significant results. 

Following the announcement of a tobacco tax increase in February 2023, the Integrated Smoking Cessation Hotline received a doubling of calls within a week. From March to October 2023, the cumulative number of calls surged by nearly 35 percent to over 1,800, compared to the eight months before the tax hike.

COSH Executive Director, Ms Vienna LAI Wai-yin, said that 41 countries have met the WHO’s recommended level of tobacco tax, which accounts for 75 percent or more of the cigarette retail price, to decrease the affordability of tobacco products. Among these nations, 17 have increased the proportion of tobacco tax to over 80 percent of the total cigarette retail price.
Majority support for tax hike
Despite last year’s tobacco tax increase, the 2023 Tobacco Control Policy-related Survey, commissioned by COSH, found that nearly 70 percent of the surveyed citizens supported a further tax increase in 2024. Almost 65 percent backed an annual tax increase. The phone survey gathered responses from 5,600 citizens aged 18 and above. Among them, 1,500 had never smoked, 1,500 had successfully quit, and 2,600 were smokers.
Professor Kelvin Wang Man-ping from The School of Nursing, The University of Hong Kong (HKU), said, “There is strong public support for raising the tobacco tax. Smokers indicated that if the retail price of tobacco increases, they would either quit or halve their smoking. They suggested that the effective cigarette retail price should be set at a median of HK$100 and a mean of HK$140.” 
The reasons cited by the surveyed smokers and successful quitters for attempting to quit smoking included saving money (54 percent of all respondents) and the high cost of smoking products (22.8 percent). Professor Wang further noted that preliminary data from the 14th “Quit to Win” Contest showed that over 30 percent of smokers reported a decrease in cigarette consumption and nearly 40 percent expressed an increased intention to quit smoking after the tax increase was implemented in February 2023.
Economic impact of smoking
Despite Hong Kong’s smoking prevalence being under 10 percent, the habit continues to significantly burden the city’s economy. Dr. Hana Ross, an Honorary Research Associate at the University of Cape Town’s School of Economics, estimates that smoking could incur annual medical and social costs of around HK$44.8 billion for Hong Kong.
A reduction in the number of smokers would lessen this social burden and positively impact public finances. Dr. Ross suggested that if Hong Kong were to increase the tobacco tax by 75 percent or more in the upcoming fiscal year, it could potentially lower the smoking rate to 8.8 percent, a decrease of 0.7 percentage points. This could save as many as 9,350 lives and reduce smoking-related social costs by nearly HK$5 billion.
Dr. Ross noted that the proposed 75 percent tax increase considers adjustments for inflation and income growth. Given the wide range of prices across different brands, she based the recommended tax hike on the most popular ones.
However, if Hong Kong freezes the tobacco tax or only makes minor adjustments based on inflation in the next fiscal year, the impact of the previous year’s tobacco tax increase would gradually diminish due to income growth. This could lead to an immediate rebound in the smoking rate as cigarettes become more affordable.
Dr. Ross noted that despite the tax increase in 2023, cigarettes in Hong Kong have remained more affordable (cheaper in real terms) than in many other countries, including France, Australia, New Zealand, Britain, the Philippines, Malaysia, Thailand, and Mainland China.
Cessation benefits low-income group
The United Nations Development Programme reports that low-income individuals are more prone to tobacco use and its associated health risks than their wealthier counterparts. This disparity accounts for nearly half of the death rate gap between the rich and the poor. Furthermore, low-income households spend a larger proportion of their income on tobacco products, exacerbating their financial strain.
A higher tobacco tax is particularly beneficial to low-income smokers. The increased cost motivates them to quit, reduce consumption, or avoid starting smoking altogether, more so than their wealthier counterparts.
Ms Lai also noted that the average monthly income of a low-income smoker is HK$10,600, with 14 percent spent on cigarettes. She added, “Quitting smoking can lead to significant savings, equivalent to 7.5 months of public housing rent or 13 months of internet use, thereby improving the quality of life among low-income groups.”
Retiree and successful quitter, Mr Lau Wai-ming, echoed Ms Lai’s sentiment. His cessation allowed him to contribute more to society through charitable donations. A participant of the “Quit to Win” Contest, Mr Lau’s improved retirement life is a testament to the benefits of quitting.
Open letter to Financial Secretary
Many sectors in Hong Kong back the enhancement of tobacco control policies. COSH, in collaboration with 102 organisations, has penned and sent an open letter to the Financial Secretary. The letter urges the Government to expedite the next phase of tobacco control measures, primarily aiming to hike the tobacco tax by a minimum of 75 percent in FY 2024-25 to meet the WHO’s standard.
Following this, the adoption of an annual increase mechanism is recommended to sustain the tax level and shield its effectiveness from income growth and inflationary erosion.
The co-signatories span a broad range of sectors, encompassing medical professions, academia, education, social services, parents, patients, smoking cessation groups, neighbourhood welfare, and youth services. This diverse support underscores the wide societal spectrum backing tobacco tax policies.


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