World’s largest market for cigarettes doubles tax
China, the world’s largest tobacco maker and consumer market, raised the consumption tax on cigarettes to 11 percent from 5 percent, the Ministry of Finance announced.
The higher rate started on Sunday and is expected to bring in an additional 20 billion yuan ($3.2 billion) in taxes this year compared to 2014, reported Bloomberg, citing a person familiar with the matter. Cigarettes are now also taxed at 0.005 yuan each
It was the first increase since May 2009 when the tax on top-brand cigarettes was raised to 56 percent from 45 percent. The move came amid similar bills proposed in the US, as research showed that a tax hike would lead to lower cigarette consumption.
China has more than 300 millions smokers, almost the size of the US population, and an additional 740 million people are exposed to second-hand smoke each year. According to official data, some 1.36 million Chinese people die from smoking-related diseases annually.