BUSINESS

Tobacco tax revenue to reach W3tr in 2017

By Catherine Chung
  • Published : Aug 2, 2017 - 11:39
  • Updated : Aug 2, 2017 - 13:44
Revenue from taxes levied on cigarettes is forecast to reach 3 trillion won ($2.8 billion) for the first time ever this year, government data showed Wednesday.

Starting in January 2015, South Korea jacked up the price of cigarettes by 80 percent from 2,500 won per pack to 4,500 won, in an effort to curb smoking.

Following this move, taxes collected from the sale of individual cigarette packs jumped from 354 won to 841 won.

(Yonhap)

According to the data by the Ministry of Health and Welfare, revenues from taxes levied on tobacco increased from 2.4 trillion won in 2015 to 2.9 trillion won in 2016, with numbers set to go up again this year.

The ministry forecasts the government could collect 3.06 trillion won in 2017.

The money the state collects from each pack should, in principle, be used to operate a national health promotion funds that cover annual health care costs associated with smoking and other related diseases.

However, criticism has risen that the extra tax revenue has been used for other purposes. Last year, 1 billion won collected as part of the tobacco tax was allocated to other areas, such as building infrastructure related to telemedicine. (Yonhap)