Proposed Hong Kong smoking ban could lead to billions lost in tax revenues: lawmaker
The smoking ban proposals to be vetted by Hong Kong's legislature this month could slash tax revenues by billions of dollars without significantly reducing the smoking rate due to smokers shifting to illicit cigarettes, a lawmaker has warned.
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Among the 10 control measures first announced in June last year, the most controversial was the banning of flavoured smoking products, with authorities saying it would ban all flavours except menthol by 2026 at the earliest, while the latter would be tackled at a later stage.
'There are worries that the measures may not help much in cutting the smoking rate but could instead lead more people to smoke illicit cigarettes,' lawmaker Edward Leung Hei from the Democratic Alliance for the Betterment and Progress of Hong Kong (DAB) told a radio programme on Thursday.
'The authorities have estimated that the revenue would rise to HK$9 billion [in 2024-25] after a tax raise, but it fell short of expectation in the end,' he said, noting that the city's revenue from the tobacco duty was around HK$7 billion (US$900 million) in 2023, with tax earnings from tobacco lost to sales of illicit cigarettes.
Leung also pointed out that the smoking rate had dropped only slightly from 9.5 per cent in 2021 to 9.1 per cent in 2023, after the tobacco duty was last raised in 2023. There was a bigger decrease from 10.2 per cent in 2019 to 9.5 per cent in 2021 before the tax raise.
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'The decrease in the smoking rate might not necessarily align with the increase in tobacco duty,' he said.
The Post earlier reported that the Health Bureau would launch the 10 control measures in phases, to further reduce Hong Kong's smoking rate to 7.8 per cent.
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