[Feature] Tabacco Tax Hike: Affects Everybody

With the Korean government waging war on tobacco by spiking up cigarette taxes by 80%, the public raised their polemical voices on this decisive move. The Korean Ministry of Security and Public Administration proposed a new tax reform on tobacco this September, led by the Park Geun-hye administration. This new policy attempts to kill two birds with one stone by curbing the smoking rate within South Korea, and gather more government revenue at the same time. The price for a pack of cigarettes will rise about two thousand Korean Won starting January, and this tax increment is estimated to bring 2.8 trillion won annually to welfare and defense spending pledges.

Opinions stand divided between smokers, and non-smokers. A recent public poll conducted by Korea Smoking Association (KSA) on September 9th showed that 73% of smokers oppose the new proposition, and 83% of non-smokers agree with the new set of laws. The poll consisted of 1,200 people over the age of 19, split with 30% smokers and 70% non-smokers. 66.3% of people all within the study agreed in the taxation policy.

The new taxation initiative heavily lies in the rationale that the increment in tobacco price will hinder smokers in buying and eventually benefit nationwide health status and reduce second-hand smoking. However, public polls show that 77% of smokers in the survey believe that the objective of the tax increment is to compensate for insufficient government revenue. Opinions of the non-smokers split, with only 50% agreeing to this statement. On the question of whether the new tobacco price is a violation of equal taxation, 55.7% replied that it was a violation, with economically active mid-thirty men agreeing strongly to this question.

Health and Welfare Minister, Moon Hyung Pyo stated this month that the taxation will lower the smoking rate for adult males by 34 percent. Although the government stated that it will reduce smoking consumption rate, public polls stated otherwise. According to the KSA public survey, seven out of ten people replied that the tax plan would not curb consumption for cigarettes. 50% of respondents expressed their opinion that the increase in tobacco will temporarily decrease smoking consumption. Out of the skeptics of the tax plan, 14% replied the tax will not lower consumption, and 5% showed the policy will have no relevance. Only a small proportion, of 29%, expressed that the taxation placement will curb cigarette purchase for smokers.

As the public poll shows, a deep rift lies between smokers, and non-smokers in relation to the new tobacco taxation laws . Support for the new taxation laws is in accord with non-smokers, due to the expectation that there will be fewer smokers in the streets and less smell of cigarettes in the air. Also, the increment in tax revenue is not targeted to the general public, but rather targeted on non-beneficial smokers. For smokers, a different voice is being raised. They believe that governmental taxation is being targeted and burdened solely on them. Along with smokers in the labor sector, the smoking advocate group KSA and the opposing political party New Politics Alliance for Democracy criticized the administration for "tax bombs on the working class" as well.

In terms of cigarette consumption, South Korea is ranked eighth highest country, per capita, in the world. The last price increase for cigarettes in South Korea was in 2004, and until now the price range had been steady at about 2,500 Korean Won per pack. The price range is the lowest of Organization for Economic and Co-operation and Development (OECD) member nations. Officials expect that the Korean public is likely to consume more tobacco due to this favorable price range. 

What is the current public response being taken for smokers? The taxation policy is finalized and price for a pack of cigarette will be spiked up starting January next year. Accordingly, smokers are stocking their personal stockpile by buying in advance, before the price goes up. Retail store tobacco sales have increased 32.9% compared to last month's sales. Should students in KAIST start stashing their smoke before the new law kicks in? Or is this a good opportunity to stop burning packs, quit smoking, and go for a healthy lifestyle?

Copyright © The KAIST Herald Unauthorized reproduction, redistribution prohibited