Tax rise assessed a success

The Korean government is claiming qualified success for its anti-tobacco policies, which last year included a massive cigarette excise increase, according to a story in The Korea Bizwire.

And the government believes that it will be seeing even more success in the future.

At the beginning of 2015, a tax hike took the price of a pack of cigarettes from about 2,500 won to about 4,500 won.

Since then, the policy has been criticized for not being as effective as had been hoped in discouraging tobacco consumption, while allowing the government to hugely increase its tobacco-tax revenue.

Tax revenue from cigarettes increased from 6.99 trillion won in 2014 to more than 10.5 trillion won in 2015, with an anticipated increase to 13.17 trillion won this year.

Meanwhile, though the smoking rate among adult males dropped to 39.3 percent from 43.1 percent, cigarette production, which saw a 29.6 percent decline in 2015, is slowly recovering. And cumulative cigarette sales from January to August this year increased by 15.7 percent compared to those of the same period of last year.

The Ministry of Strategy and Finance issued a press release on Monday claiming that this year’s increases in cigarette sales and output were the result of a base effect caused by the fact that cigarette sales had plummeted in early 2015 when the tax increase went into effect.

According to the ministry, quarterly sales of cigarettes prove this to be true. Although this year’s Q1 sales saw an increase of 42.8 percent compared to those of Q1 2015, the percentage increase dropped in Q2 to 7.6 percent, and in July and August to 1.6 percent.

“We assess that our anti-smoking policy has made progress for the most part,” said a ministry official. “Once we begin attaching warning images on cigarette packets starting December 23, the effects will be even greater.”