Customs: Industry to Bear Cost of Cigarette Tax Labels
In a move that aims to combat the circulation of untaxed cigarettes in Hong Kong, Customs Commissioner Chan Tsz-tat has announced that the tobacco industry will likely be responsible for covering the expenses associated with a new labelling system. This system will help consumers differentiate between duty-paid cigarettes and illicit ones, which often have similar or identical packaging.
Proposed Labelling System
Chan explained that the proposed labelling scheme will include anti-forgery features on cigarette packaging, similar to those found on banknotes. These features will make it challenging to replicate the labels, ensuring that duty-paid cigarettes can be easily distinguished from untaxed ones. Additionally, a digital tag will be attached to each pack of cigarettes during production. This tag will remain inactive until the duty is paid, at which point it can be activated from the back end, indicating that the batch has been taxed. Cost Distribution
Despite concerns that tobacco companies might pass on the additional costs to consumers, Chan assured the public that the price of cigarettes is unlikely to be affected. He stated that the cost of adding labels is minimal compared to the selling price of cigarettes, which currently stands at over HK$100 per pack. As such, the burden of covering these costs will fall on the tobacco industry. Legislative Amendments
In addition to the labelling system, authorities are planning to introduce stricter penalties for individuals who exceed the permitted limit of duty-free cigarettes when entering Hong Kong. Currently, each traveler is allowed to bring 19 sticks of cigarettes into the city without paying taxes. However, Chan revealed that legislation may be amended this year to increase fines for offenders from HK$2,000 to HK$5,000.
Despite concerns that tobacco companies might pass on the additional costs to consumers, Chan assured the public that the price of cigarettes is unlikely to be affected. He stated that the cost of adding labels is minimal compared to the selling price of cigarettes, which currently stands at over HK$100 per pack. As such, the burden of covering these costs will fall on the tobacco industry.
Legislative Amendments
In addition to the labelling system, authorities are planning to introduce stricter penalties for individuals who exceed the permitted limit of duty-free cigarettes when entering Hong Kong. Currently, each traveler is allowed to bring 19 sticks of cigarettes into the city without paying taxes. However, Chan revealed that legislation may be amended this year to increase fines for offenders from HK$2,000 to HK$5,000.
The introduction of the new labelling system and enhanced penalties underscores the government’s commitment to curbing the illicit cigarette trade in Hong Kong. By holding the tobacco industry accountable for the costs associated with these initiatives, Customs aims to protect consumers and maintain the integrity of the local tobacco market.
