South Korea’s tobacco tax revenue shot up more than 50 percent in 2015 from a year earlier on a spike in cigarette prices, despite weaker sales, the finance ministry said Thursday. (Image : Johnny & Aggy / Flickr)
SEJONG, Jan. 7 (Korea Bizwire) – South Korea’s tobacco tax revenue shot up more than 50 percent in 2015 from a year earlier on a spike in cigarette prices, despite weaker sales, the finance ministry said Thursday.
The cigarette tax revenue reached 10.5 trillion won (US$8.7 billion) last year, up 51.4 percent from 7 trillion won tallied a year ago, according to the Ministry of Strategy and Finance.
Seoul marked up taxes levied on cigarettes by 2,000 won, starting in January last year, to raise the price to 4,500 won per pack, citing the need to discourage smoking.
Sales of cigarettes fell 23.7 percent to 3.33 billion packs last year from a year ago, with its shipments dropping 29.6 percent on-year to 3.17 billion packs.
“The rise in tax revenues is larger than our earlier estimate of 2.8 trillion won,” the ministry said in a release. “It is because of a delay in introducing tobacco packaging warning pictures.”
The revised health law that makes it mandatory for tobacco makers to present stronger warning messages and pictures on the packaging of cigarettes came into effect in late December after years of controversy.
Local civic groups have argued that the higher cigarette tax is aimed at raising tax revenues and propping up sluggish inflation, resulting in putting an extra burden on consumers.
South Korea’s consumer prices index gained a record 0.7 percent last year, with the cigarette price hike contributing 0.58 percentage point.
(Yonhap)
