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Minister of Health and Welfare

By Choi Sung-jin, staff reporter

The Ministry of Health and Welfare has announced plans to push for raising the price of cigarettes to 4,500 won (US$4.42) per pack during the current regular session of the National Assembly.

The move means a nearly two-dollar jump could be in store within this year for brands like South Korea’s top-selling Esse Lights by KT&G, which currently sells for 2,500 won (US$2.46) a pack. The Korea Smokers’ Association and other smokers’ rights groups were up in arms over what they described as an attempt to scapegoat cigarettes to make up a government shortfall in tax revenues.

Minister of Health and Welfare Moon Hyung-pyo explained the decision in a meeting with reporters on Sept. 2 at the Government Complex in Sejong.

“South Korea has the lowest cigarette prices in the OECD right now,” Moon said.

“If we want to reduce the steadily growing rate of smoking by young people, we need to raise prices to at least 4,500 won a pack,” he added.

In the past, the ministry has repeatedly recommended raising cigarette taxes to counter the various problems associated with smoking. Its argument is that the price per pack would automatically go up with an increase in the various taxes on it, including the cigarette consumption tax, a National Health Promotion Fund contributions, a local education tax, and a value-added tax.

“The ministry’s opinion is that price has to go up by at least 2,000 won,” explained Moon on the amount of the increase. “Ultimately, we believe the price per pack needs to reach the OECD average of 7,000 won (US$6.87) in the long term if there is to be a preventative effect.”

“The resources generated from the price increase would be channeled back into smoking cessation clinics and other prevention policies,” he added.

Moon also hinted at the ministry’s plans for when and how prices would be raised.

“There are a number of bills on the slate for the National Assembly, including an amendment of the National Health Promotion Act,” he said. “We’d like to do it as government-initiated legislation, under the Ministry of Health and Welfare’s leadership.”

“Given how serious the smoking rate issue is, we hope to see the price increase passed before this National Assembly regular session ends,” he added.

When asked if the ministry had coordinated on the increase with the Ministry of Strategy and Finance or other agencies, Moon explained, “In terms of cigarette taxes, the National Health Promotion Fund contributions fall under our agency, so we plan to continue discussing matter with other agencies going ahead.”

Choi Bi-oh, chief of planning and administration for the Korea Smokers’ Association, called the administration’s plans to increase cigarette taxes and prices “just a cheap tactic aimed at shaking down smokers to make up for a more than eight trillion won (US$7.9 billion) shortfall in tax revenues.”

“Who in the public is going to buy that the government’s trying to ‘promote national health’ with this increase when it’s not taking any actions on cigarette manufacturing or sales?” Choi asked.

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