South Korea may raise cigarette taxes next year, with cigarette prices rising by up to 8,000 won

South Korea may raise cigarette taxes next year, with cigarette prices rising by up to 8,000 won

According to Korean media etnews, the South Korean government may increase cigarette taxes to make up for tax losses caused by the long-term economic recession. Some have also raised the possibility that cigarette prices will rise significantly next year, by as much as 8,000 won.

According to industry insiders, at a recent academic conference, the argument was made that the price of cigarettes should be gradually increased to 900 won per year. The Korean Smoking Cessation Association pointed out at an academic conference with the theme "Current Situation and Prospects of Tobacco Price Policy" that it needs to be linked to the price index to gradually increase rather than suddenly increase.

Starting from 2024, Korean cigarette prices must gradually increase every year to maintain the actual price of cigarettes relative to gross national income. By 2030, cigarette prices will reach the OECD average of 10,000 won, so that tax revenue is stable and predictable. It is also said to be effective in preventing continued smoking and reducing smoking rates.

Lee Sung-gyu, director of the Korea Tobacco Control Research and Education Center, said in a speech: "The 'little' cigarette price increase measures taken by the government so far to promote a systematic smoking cessation policy have limitations." "We need a policy that makes people believe in us It can be done," he said.

In addition to the gradual increase, a plan to increase prices by approximately 1,800 won every two years has also been proposed. In response, some people countered that this is unrealistic because when the price of cigarettes was raised from 2,500 won to 4,500 won in 2015, social costs increased due to public resistance to the tax.

So far, Korean cigarette prices and tobacco taxes have sporadicly increased sharply. With cigarette prices soaring, the effect of reducing smoking rates may seem obvious, but the effects of smoking cessation are short-lived. In fact, as cigarette prices increased, smoking rates fell by 1.8 percentage points from 24.2% in 2014 to 22.6% in 2015. However, the following year, 2016, the smoking rate showed an upward trend again, reaching 23.9%. Tax revenue also appears to have increased in the short term, but tobacco-related tax revenue has stagnated or declined since 2016.
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