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No plan to raise cigarette prices: govt.

Feb. 9, 2024 - 10:05 By Yonhap

The government is not considering increasing cigarette prices despite falling tax revenue, according to officials Friday.

Some media reports have raised the possibility of the government increasing cigarette prices after the April election as it has experienced a shortfall in tax revenue amid an economic slowdown.

Last year, South Korea's total revenue, including tax gains, fell 77 trillion won ($57.9 billion), as tax gains fell 51.9 trillion won from a year earlier due mainly to weak corporate performance and the sagging real estate market, according to government data.

"It is not true that the government is reviewing any increase in cigarette prices or adjustment in tobacco tax rates. We have no such plan even after the general elections in April," a finance ministry official said.

The ministry plans to hold a meeting with officials in the tobacco industry and deliver "such a firm stance" once again, another official said.

In 2015, the government last raised the price of cigarettes by 80 percent to 4,500 won per pack, citing the need for more efforts to reduce smoking and better promote public health.

Of the price, more than 70 percent is for tobacco consumption, value-added and various other taxes.

In 2021, the health ministry announced a plan to raise the price further to around 8,000 won over the decade to come, saying the average per-pack price in member nations of the Organization for Economic Cooperation and Development comes to around $7.

Following the price hike in 2015, tobacco taxes collected have been on a constant rise from 7 trillion won in 2014 to 10.5 trillion won in 2015 and further to 11.2 trillion won in 2017. The amount came to 11.8 trillion won in 2022.

The smoking rate among Korean men aged 19 or older had come to a record low of 19.3 percent as of 2021,

Sales of cigarettes in South Korea inched down for the first time in four years in 2013, but sales of duty-free cigarettes surged 60.7 percent on-year and demand for electronic cigarettes advanced 12.6 percent, government data showed. (Yonhap)