To quit smoking or not to quit--that is the question. Beginning on the New Year’s Day in 2015, the smokers in Korea will have to pay 4,500 won (US$4.35) per pack of cigarettes, which is almost double the present price of 2,500 won per pack. The government has also decided to use an indexation system so that the price of cigarettes will automatically rise whenever the consumer price increases by five percent.
The government said that the price jumps of cigarettes are aimed at improving the health of the people hoping that the enormous price increase will induce the smokers to quit smoking.
However, not many people believe this because for 4,500 won a pack not many people will quit smoking. Reports say that they will start thinking of quitting if the price goes up somewhere around 9,000 won per pack.
The price of cigarettes was last raised by 500 won in 2004 and has been frozen at 2,500 won per pack for the past ten years, wherefore it is the lowest among 34 OECD countries.
The cigarette price rise will increase the national tax venue by 2.8 trillion won (approx. US$2.71 billion) and will have the effect of increasing the consumer price by 0.62%.
Of the total amount of money coming from extra tax revenues from the increased cigarette prices, the government has decided to increase the portion allocated for the promotion of health from 14.2% of the revenue to 18.7%.
The government said that it will also push ahead with an anti-smoking treatment to bring the adult smoking rate of men and women from 43.5% (2013) down to 29% by 2020.
When the government did this in 2004 when it raised the cigarette prices by 500 won, it successfully reduced the people? smoking rate from 57.8 in 2004 to 45.9% in 2006.
In addition to the cigarette price increases, the government has also announced that it will increase the residence tax and automobile tax by 100% in the next two to three years.
The Ministry of Security and Public Administration said that it will increase the residence tax from the present 4,620 won per person to 10,000 won in the next two years. It also said that it will raise the automobile tax which has been frozen since 1991 by 100% by 2017.
Netizens (frequent users of the Internet) complained, “They really get on the nerves and make us smoke more and more so that they can levy more and more taxes.”