Editorial | Stub out costly Hong Kong trade in illicit cigarettes
Stepping up of enforcement action against smugglers by Hong Kong authorities to be welcomed on both health and financial grounds
Critics claim higher taxes on cigarettes lead to more smuggling of cheap, tax-free alternatives. Figures from the Customs and Excise Department for seizures of smuggled products in Hong Kong up to November tend to support that argument.
But they also show the importance of resolute law enforcement in combating a crime that undermines public health. They do not include the New Year’s Eve interception of two fishing vessels, the arrest of five mainlanders and the seizure of illicit cigarettes worth HK$114 million (US$14.6 million) intended to boost stocks for Lunar New Year.
Cigarette smuggling has bounced back after the pandemic to surpass pre-Covid-19 levels. This has prompted authorities to study a laser labelling system for tax-paid cigarettes to combat the deception of statutory health warnings on illicit cigarette packaging.
Customs estimated the value of seizures in the first 11 months of last year at HK$2.24 billion, representing a potential loss of HK$1.64 billion in revenue. This reflects the steep increase in tobacco duty of 80 HK cents (10 US cents) per cigarette for the second year in a row.
Officials attributed the surge in seizures to increased enforcement following tax increases. The incentive to risk participation in the illegal trade or patronise it is a challenge to the authorities.
