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New government looking for more taxes

| June 25, 2014

Indian Health Minister Dr. Harsha Vardhan is proposing a tax hike of INR3.5 per stick on cigarettes of all lengths and the removal of tax exemptions for bidi manufacturers as part of the new government’s 2014–2015 budget, according to a story in the latest issue of the BBM Bommidala Group newsletter.

The budget is due to be presented on July 10.

Vardhan, in a letter to Finance Minister Arun Jaitley, said raising the duty on cigarettes as a percentage of the retail price from about 45 percent to more than 60 percent would yield public health as well as fiscal benefits.

He said the previous government’s 19 percent increase on cigarette taxes in the February 2013 budget had been too meagre to have any meaningful impact.

In any case, since the increase had been focused on longer cigarettes, it had led to a spike in the production of smaller cigarettes.

Applying the levy to all cigarettes would prevent the industry shifting production and marketing shorter-length products.

Vardhan wants the bidi industry to be redefined to ensure the collection of revenues due and prevent tax evasion in the long run.

E-cigarettes raise taxing question

| June 25, 2014

Quitting smoking in the Philippines might soon become more expensive and, therefore, more difficult because the authorities there are considering the imposition of higher taxes on e-cigarettes, according to a story in the Philippine Daily Inquirer.

While the benefits of e-cigarettes over tobacco cigarettes were still being debated, Commissioner Kim Jacinto-Henares of the Bureau of Internal Revenue said tax-wise, both might be considered the same thing.

“[The question is] whether we can already cover [electronic cigarettes] with the present law because it’s just a different permutation of a cigarette,” she said. “It’s still a cigarette. That’s one way to tackle it.”

The use of e-cigarettes is marketed as being one way to help people quit smoking, but the Philippine Medical Association (PMA) last year urged President Benigno Aquino to ban advertisements that suggested e-cigarettes presented a safe way of quitting.

And some health advocates have pushed for a ban on e-cigarettes.

India mulls over tobacco buying age of 25

| June 24, 2014

The Indian Health Ministry is considering a plan to lift the minimum age for buying tobacco products from 18 to 25, according to a story in the most recent issue of the BBM Bommidala Group newsletter.

Health Secretary Lov Verma said the ministry was writing to the state governments, which are responsible for such matters, asking them to lift the age.

The ministry said also that it would submit further suggestions to the states, including raising VAT on tobacco products and creating greater awareness about the dangers of smoking.

Philippines might bring in minimum price

| June 24, 2014

The Philippines’ Bureau of Internal Revenue (BIR) has suggested setting a minimum price for all cigarettes sold in the country “to ensure a level playing field” and discourage more people from taking up smoking, according to a story in The Philippine Star.

BIR commissioner Kim Henares broached the idea during a forum held yesterday, at which she was asked about the steps the government was taking about the proliferation of PHP1 per-stick cigarettes.

The second part of the so-called sin tax law (Republic Act 10351) was introduced in January 2013 with the aim of making tobacco more unaffordable to the public.

Henares said the implementation of the sin tax law in January 2013 had resulted in increased revenues for the government and that she saw no need to amend the “landmark reform.”

“I think you should lobby for a law which will require a minimum price, and not to touch the sin tax law anymore,” she told the forum delegates. “Lobby for a law that cigarettes in the Philippines should not be sold at below a certain price.

“If your complaint is about the cheapness of the price, then you go to the cost, you put a floor on the price. I don’t know how much it should be but the price is not an issue for the BIR.”

Another Davidoff to be launched in Korea

| June 24, 2014

Imperial Tobacco is to launch in South Korea a new version of Davidoff, according to a story in The Korea Herald.

The product will be launched through KT&G, with which Imperial has had a brand licensing agreement since 2010.

Roberto Ascoli, a divisional director at Imperial, said the licensing agreement had been a win-win strategy.

“They [KT&G] are the ones who have an infrastructure to quickly distribute and support brands,” Ascoli said. “And from their side, they also needed a partner with a premium brand—a brand that will compete with Marlboro and Dunhill. So there was a very much mutual benefit in working together.”

Ascoli’s remarks came during a short visit to Korea to discuss the imminent launch of the new Davidoff.

Sales of Davidoff also have benefited from KT&G’s market dominance, Imperial officials said, though they declined to reveal the figures.

KT&G is the dominant player in Korea, with a 62.6 percent market share in the first quarter.

Stressed-out and smoking in Hong Kong

| June 24, 2014

Many Hong Kong women take to cigarettes because of stress, according to a story in The Standard, quoting the Council on Smoking and Health.

And 60 percent of them don’t even think about quitting.

According to government census figures, there were at least 96,800 women smokers in 2012, compared with 56,100 in 1990.

And according to the government’s Thematic Household Survey Report, about 60 percent of female smokers had never tried to quit.

In a two-part study, the council and the University of Hong Kong looked into the cases of 73 female smokers in 2010 and surveyed 3,306 more women who were smoked, had quit or had not started in 2011–2012.

Researchers said the first part of the survey indicated that stress and moods were among the main reasons why women started and continued smoking.

In the second part, 45 percent of 1,274 current and former smokers said they started to smoke because of curiosity and 37 percent blamed peer influence.

William Li Ho-cheung, assistant professor at the HKU School of Nursing, said about 15 percent took up smoking due to emotional reasons that included feeling sad or bored (7.5 percent), being under pressure (4.9 percent) and needing to control negative emotions (2.2 percent).

Council chairwoman Lisa Lau Man-man said there should be increased resources for smoking cessation services and more emotional support for female smokers.

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