The Ministry of Strategy and Finance said it has raked in 4.3 trillion won (US$3.8 billion) from cigarette sales, up 36 percent from the 3.16 trillion won posted a year earlier. (image: Kobiz Media / Korea Bizwire)
SEOUL, July 12 (Korea Bizwire) — South Korea’s cigarette tax revenue jumped in the first six months of 2015 from a year earlier on the back of the country’s new tax policy that began as of January, data showed Sunday.
The Ministry of Strategy and Finance said it has raked in 4.3 trillion won (US$3.8 billion) from cigarette sales, up 36 percent from the 3.16 trillion won posted a year earlier.
The increase is significant as the sales of cigarettes in contrast fell 28.3 percent over the cited period to 1.46 billion packets. The government initially estimated sales would fall 34 percent on-year.
South Korea implemented a new law this year that makes the average price of a pack of cigarettes go up 2,000 won by adding a special excise tax and other indirect taxes on cigarettes.
Policymakers have claimed the rise in prices will force many people to quit smoking altogether, although detractors have argued it may not have the desired effect and only put an extra burden on consumers.
While the new price policy heavily weighed on cigarette sales in January, with the tax revenue rising only 40 billion won on-year, the returns from the segment continued to rise throughout 2015, with the amount jumping 320 billion won on-year in June.
Industry watchers said the increase came as consumers who quit smoking in January gave up on their New Year’s resolutions.
(Yonhap)
