S. Korea's tobacco tax revenue gains on price hike
South Korea's tax revenue from tobacco sales rose considerably in the first four months of this year from a year ago thanks to a recovery in shipments from a tumble at the start of the year following a price hike, officials said Sunday.
Starting Jan. 1, the government raised cigarette prices to 4,500 won (US$4.13) per pack from 2,500 won, with more than 60 percent of the price stemming from taxes.
According to the officials, the tax revenue from cigarette sales was about 600 billion won ($551 million) more in the January-April period than in the same period a year earlier.
The increase in tax revenue was attributed to a recent pickup in cigarette sales in the wake of a plunge at the beginning of the year.
Cigarette sales more than halved to 180 million packs in January from 400 million packs in December before rising to 250 million packs in March and 300 million packs in April.
Officials said the price hike will likely expand the government's tobacco tax revenue sharply this year.
In a report to the National Assembly last year, the finance ministry expected that the price hike could bring in 2.85 trillion won in extra tax revenue in 2015. Last year, the government collected 6.7 trillion won in tax revenue from tobacco sales. (Yonhap)