Marking World No Tobacco Day on May 31, the World Health Organization set out the goals of its campaign for 2014: Prompting governments to increase taxes on tobacco to levels that reduce tobacco consumption, and marshaling individuals and civil organizations to encourage their governments to increase taxes on tobacco.
The WHO campaign is based on the conviction that raising taxes on tobacco is the most effective policy to reduce tobacco use and is also the most cost-effective. The organization suggests that each signatory of the Framework Convention on Tobacco Control increase excise tax on tobacco by 50 percent.
The WHO guidelines seem to have emboldened the Korean Health Ministry, which said this week that it will “strongly push” for an increase in the tobacco tax. A senior ministry official said that the government has yet to discuss how much it should raise the tobacco tax, but quickly added that it should be “significant.”
This is a welcome move as there are ample reasons to raise tobacco taxes in Korea, which has one of the highest smoking rates and some of the lowest cigarette prices in the world.
A WHO study shows that higher taxes are especially effective in reducing tobacco use among lower-income groups and in preventing young people from starting to smoke. It says a tax increase that ups tobacco prices by 10 percent decreases tobacco consumption by about 4 percent in high-income countries and by up to 8 percent in most low- and middle-income countries.
Ignoring the most effective policy option to curb smoking, Korea has frozen taxes on tobacco products since 2004, thereby keeping the price of a pack of cigarettes at 2,500 won. This is the lowest among the member states of the Organization for Economic Cooperation and Development. Taxes and levies imposed on Korean tobacco products average 62 percent, lower than the WHO-suggested 70 percent.
Partly because of the cheap tobacco prices, Korea has one of the world’s highest smoking rates ― nearly 50 percent for male adults and 25 percent for high school seniors, the latter figure being twice as high as that for their American counterparts.
There have been on-and-off government discussions about raising tobacco taxes, but these have fallen through due to stiff opposition, not only from the economic ministries, which were concerned about inflation, but also smokers.
Opponents insisted that tobacco is a daily necessity for ordinary citizens and that raising its price would stoke inflation. They also accused the government of relying on the expedient measure of a “sin tax” to raise tax revenue.
By diverting much of the tobacco tax revenue to expenses for other than smoking-related health programs, the government lost ground to such opposition. The Health Ministry’s plan to raise the tobacco tax must include measures to address this problem.
A vigorous push for nonprice policies like the introduction of smoking warning graphics on cigarette packs and a radical expansion of nonsmoking zones will also help the ministry avoid the criticism that it is more focused on raising tax revenue than curbing smoking.
As the WHO says, tobacco use is the single most preventable cause of death globally and is currently attributable to 10 percent of adult deaths worldwide. This must change and Korea’s economic level and health consciousness have grown enough for it to take the lead.
