China More Than Doubles Cigarette Tax to 11%

Increased tax is one of the latest attempts to reduce the country’s high smoking rate.

May 14, 2015

BEIJING – Beginning this week, smokers in China are paying more for a pack of cigarettes, as the Chinese government implemented an increase in the wholesale tax on cigarettes, raising it from 5% to 11%.

Smokers in China generally pay between $0.92 and $2.42 for a pack of cigarettes, and the new tax will add less than one cent per cigarette sold.

The higher tax is the government’s latest move in a series of efforts to curb China’s smoking rate, even as the government depends on the tobacco industry for 7% to 10% of the nation’s tax revenue, according to Reuters.

With 300 million smokers (more than a quarter of its population), China is responsible for about a third of all the smokers in the world, according to the World Health Organization. China also produces more tobacco than any other country – 41% of the world’s cigarettes are made in China – and tobacco sales are a key source of income for the Chinese government. It remains to be seen whether the pending price hike will be enough to discourage large numbers of Chinese residents from lighting up, or whether it will merely add to the government's lucrative tobacco-based tax revenue stream.

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