Hong Kong - cigarette smuggling soars after tax increase..

April 12, 2009 - Cigarette smuggling trade soars in Hong Kong after tax increase. The tax on cigarettes in Hong Kong was pushed up 50 percent Wednesday, February 25, 2009 to try to curb a worrying increase in smokers. The increase pushes the price of a packet of 20 cigarettes to almost 5 US dollars, still around half the price of cigarettes in Singapore or Australia.

The number of seizures involving smuggled cigarettes has soared 127 per cent in Hong Kong since the government increased the tobacco tax. A total of 287 cases of smuggling, distribution, selling and storing of illegal cigarettes were detected in March, compared with 126 in March 2008, the South China Morning Post said.

However, in a statement, the Customs and Excise Department attributed the rise to stronger enforcement measures introduced because it anticipated a rise in smuggling because of the increased duty. The head of the Revenue and General Investigation Bureau, Chow Chi-kwong, said the department had been closely monitoring illicit cigarette activities at all control points and on the streets after the levying of the new tobacco duty.

In a series of recent operations, customs officers raided 16 illicit storage and distribution centres, arresting 19 people and seizing 1.48 million cigarettes with a sales value of 2.4 million Hong Kong dollars (308,000 US dollars) and a dutiable value of 1.78 million Hong Kong dollars.

Another 67 people were arrested and cigarettes worth 210,000 Hong Kong dollars were seized in 63 cases involving phone delivery services.

On the anti-smuggling side, customs seized five cases containing 9.35 million cigarettes worth about 17.75 million Hong Kong dollars and a dutiable value of 11.26 million Hong Kong dollars.

Chow: "Customs will continue to closely monitor illicit cigarette activities and strengthen manpower deployment to step up enforcement action against any kinds of illicit cigarette activities. Apart from prosecuting the sellers, customs will also spare no effort to take enforcement action against buyers of illicit cigarettes." (dpa)

Reference: Cigarette smuggling trade soars in Hong Kong after tax increase, submitted by Mohit Joshi, TopNews.in, 4/10/2009.