TAIPEI (Taiwan News) - An amendment to the Tobacco and Alcohol Tax Law passed its third and final reading in the Legislature Friday, raising cigarette tax by NT$20 per pack.
The amendment will raise the cigarette tax from NT$590 per 1,000 cigarettes (per kilogram) to NT$1590, which will see a NT$20 increase in cigarette price per pack from NT$11.8 to NT$31.8.
The new amendment will help reduce tobacco consumption by 20 percent, generating an estimated NT$23.3 billion increase in revenue for the nation, according to the Ministry of Finance.
According to government estimates, 1 percent increase in the price of cigarettes can reduce consumption by 0.8065 percent.
The move comes as a way to open up new revenue sources for the government’s long-term care program, an important platform for President Tsai Ing-wen’s administration, which aims to create a high-quality, affordable and extensive long-term care system amid growing concerns of the nation’s aging population.
Increasing the price of tobacco through higher taxes is an effective policy tool to reduce the health and economic burden of tobacco use, said Finance Minister Sheu Yu-Jer.
The increased tax will provide additional revenue of about NT$23.3 billion per year to maintain funding for the long-term care program, while also decreasing the prevalence of tobacco use and improving long-term public health, he said.