[Intl-tobacco] Two-pronged attack in $56m allocation (fwd)

[Robert Weissman]

Two-pronged attack in $56m allocation
by Sanna So
Source: Hong Kong Standard, Thursday, 3/9/00

STORY: WITHOUT raising the rate of tobacco duty in the coming fiscal year,
the government has earmarked $20 million for anti-smoking education and
$36 million for efforts against contraband cigarettes over the next three
years.

Sir Donald said the measures aimed to achieve the ``dual purpose of
protecting the health of the public and increasing government revenue''.

He said in his Budget speech yesterday that $20 million had been reserved
for the Hong Kong Council on Smoking and Health (Cosh) for a three-year
anti-smoking education program.

An annual provision of $12 million would go to the Customs and Excise
Department for three years from 2000-01. A special task force would step
up action against contraband cigarette sales, Sir Donald said.

``Our review showed that smuggling and the sale of contraband cigarettes
remain rampant,'' he said.

``Increasing the rate of tobacco duty would only make such cigarettes even
more attractive. Bringing down the rate is not a viable option either as
this would run counter to our objective of protecting health.''

This is the second year the tobacco tax was frozen. During the period of
1993 to 1998, tobacco duty was raised annually between 6 and 9.5 per cent,
except in 1994 when there was no increase.

Albert Chan Yu-chung, executive director of the Tobacco Institute of Hong
Kong, said it was advisable to maintain tobacco tax and avoid widening the
price difference between smuggled and duty-paid cigarettes.

The Customs and Excise Department last year seized 239 million sticks of
dutiable cigarettes with a duty potential of $183 million. It was more
than double the 104.6 million sticks seized in 1998 which had a duty
potential of $79.7 million.

Duties received from tobacco last year amounted to about $2.49 billion.

Mr Chan applauded the government's determination to step up law
enforcement against tobacco smuggling. He said the institute would
increase the ceiling of its informants' reward scheme, currently set at
$750,000 a year, to encourage reporting on the sale and purchase of
contraband cigarettes.

Cosh also welcomed the government's view to maintain the tobacco levy at
its present level.

Cosh executive director Marcus Yu Yin-sum said, ``Without cutting the
rate, youth smoking is not encouraged.''

Independent legislator Leong Che-hung, who represents the medical sector,
welcomed the government's move to educate the public against smoking and
to fight contraband cigarettes.

``I do hope that these actions are going to show their effect and if they
do not, I hope the secretary will quickly increase cigarette tax so as to
improve the health of society,'' Dr Leong said.