Korean Job Discussion Forums

[wylies99]

01-11-2009 19:46

Is Tobacco Too Good a Business to Give Up?
http://www.koreatimes.co.kr/www/news/nation/2009/01/123_37669.html

By Jane Han
Staff Reporter

Smoking a pack of cigarettes a day used to cost Choi Il-kwang about 75,000 won per month. Since he quit six months ago, he has saved about 450,000 won. This helped his finances and his health, but it didn't necessarily do any good to the government's tax revenue from tobacco.

According to anti-smoking group estimates, the government collects about 5 trillion won a year from taxes levied on tobacco products. About 15 percent of the money is earmarked for anti-smoking campaigns, but the remainder is used for general state spending.

Choi Jin-sook, the chairwoman of the Korea Association of Smoking & Health, a leading anti-smoking campaigner, said because of the much-needed funding, the government is stuck in an awkward position where it can neither persuade people to quit nor continue smoking.

``You have different ministries promoting conflicting policies depending on their interests,'' she said, referring to how the Ministry of Health, Welfare and Family Affairs and the Ministry of Strategy and Finance are at odds over the latest push for an anti-smoking campaign.

The health ministry, claiming that it will lower the country's smoking rate by 20 percent by 2020, is trying to pass a law that would ban smoking in virtually all public areas. The latest effort is in line with the World Trade Organization's 2005 global health treaty aimed at promoting smoking restrictions.

However, the finance ministry, which controls state coffers, is apparently putting the brakes on the bold move, arguably because the change would mean lost tax money.

``Take a 2,500 won cigarette for example,'' said Choi. ``A consumer is paying about 1,600 won in consumption, local education and national health promotion taxes. The actual price of the tobacco is surprisingly cheap.''

She said the government's policy of taxing smokers out of smoking is an outdated and unethical practice, but it remains intact because the funding is tempting.

The income is so lucrative that some critics have even speculated that a large chunk of the state's budget shortage resulting from the government's tax cut on expensive homes will be made up with an increase in tobacco tax.

Authorities have been hinting at a moderate tax hike to raise domestic cigarette tax rates up to par with those of OECD countries. South Korea currently imposes taxes that amount to 65 percent of a product's selling price, which is less than the OCED countries' 70 percent.

``The government welcomes tax hikes aimed at supposedly keeping smoking under control, but a complete ban like the one promoted by the health ministry is shunned,'' said Choi.

And the resistance is seemingly dissuading the ministry from pressing for stronger action.

Shin Seung-il, an official at the Ministry of Health, Welfare and Family Affairs, said Friday that a ban on smoking areas probably won't be implemented anytime this year due to a ``tough review procedure'' that is expected in the political sphere.

Aside from the government's internal dispute, cigarette makers' infamous lobbying of lawmakers will also play a decisive role in getting the law written in or not.

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[Guri Guy]

[Bigfeet]

Depends on how much the government spends on healthcare. You may get more taxes from a smoker in the short-term, but that person will be a huge money hole when all the smoking makes him sick later in life. If the government will not be paying for his health care costs while he slowly dies, then tax away.

[ernie]

i don't understand how taxing cigarettes is unethical. i can see it as a conflict of interests between public health and revenue, but unethical? get real. i can understand having a problem with taxing the hell out of basic necessities like food or shoes, but nobody NEEDS to smoke. tax the bejesus out of em, i say.

[Crockpot2001]

If successful at decreasing tobacco use, it would be interesting to also weigh that against weight gains. The old ideas of ideal body weight in the US are being looked at again as we decrease our tobacco use. Maybe we were too thin and that was due to artificial appetite supression secondary to tobacco use.