Starting this year, the tax levied on a pack of cigarettes rose by 2,000 won (US$1.79), raising the average price per pack from 2,500 won to 4,500 won. (image: Kobiz Media / Korea Bizwire)
SEJONG, June 17 (Korea Bizwire) — South Korea’s cigarette tax revenue jumped in the first five months of 2015 from a year earlier due mainly to a tax hike, government data showed Wednesday.
Starting this year, the tax levied on a pack of cigarettes rose by 2,000 won (US$1.79), raising the average price per pack from 2,500 won to 4,500 won.
According to the data by the finance ministry, the government collected 880 billion won ($786 million) more in cigarette taxes in the January-May period than a year earlier.
Should the current pace continue, total revenue from cigarette sales will likely surpass the 10 trillion-won mark this year, from 6.74 trillion won in 2014.
“On top of the tax hike, there has been a steady rise in sales after the cigarettes people bought before prices went up started to run dry,” the ministry said.
In May alone, cigarette sales were up 270 billion won on-year.
Reflecting this, the total number of cigarettes produced by tobacco companies started rising sharply in March.
On the other hand, the ministry said tobacco shipments tumbled 31 percent on-year in the January-May period as more people are trying to cut back on smoking. The government predicted cigarette demand would fall 34 percent following the tax increase.
“The overall decline is similar to what the government had estimated, with the difference caused by the delayed passage of a bill that would make it mandatory to put very large health warnings on cigarette packs,” an official said.
He said the bill should be passed by parliament late this month.
(Yonhap)
