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Raising taxes on tobacco products is unlikely to help control smoking, says a signed article in Dahe Daily. An excerpt follows: Lam Tai-hing, a professor with the University of Hong Kong, suggested that the best way to control smoking was by raising tobacco prices through imposing higher taxes. But after Lam voiced his opinion at a forum in Beijing, he received floods of criticism from Internet users and other groups. From an academic perspective, Professor Lam's suggestion agrees with the economics of tobacco control. Research indicates that smokers are sensitive to the price of tobacco products, although their needs are fixed to some extent. The government of Canada raised the tax on tobacco products in 1982, seeing consumption slump as prices leaped. And tax rises also helped control tobacco consumption in South Africa and the United Kingdom. So why would so many people in China reject a suggestion proven successful in both theory and practice? Many of the objectors do not doubt the effectiveness of the tax hike. Instead, they are afraid that once the rise is put into practice, higher profits, rather than tobacco control, will become the real goal. Admittedly, many countries have successfully reduced smoking with tax increases. But such success has a precondition that the government does not need the benefits brought about by tobacco consumption. That it does not mind whether a policy on tobacco control will hurt tobacco producers or damage revenue from tobacco taxes. Only a government with no need for the tobacco industry can stand firmly against smoking in the name of public health. This is not the case in China. Many local governments work closely with tobacco producers and thus do not have a strong motivation to stand against smoking. On the one hand, many local governments rely heavily on the taxes collected from tobacco producers about 30 of China's 100 biggest taxpayers are from the tobacco industry, according to a report by the tax watchdog. On the other hand, much tobacco production is still under a State monopoly and many tobacco retailers are also administrative departments. It is impossible to control smoking with tax hikes under such a situation. The only result would be that poor people wouldn't be able to afford their usual brand of cigarettes and would turn to cheaper ones, potentially causing even more damage to their health. A tobacco price hike will only benefit tobacco producers and the government, while smokers lose both their money and their health. The problem with Professor Lam's suggestion is that many local governments and businesses are too closely connected. (China Daily November 1, 2006) |
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