Effect Of The Taxation System On China 's Tobacco Industry

The city is going to see a significant drop in revenue, with this bill. New York City has the highest cigarette tax rate in the United States with the minimum price for per pack of cigarettes in the city is $10.50. The Campaign for Tobacco-Free Kids, illustrate that of the minimum amount, $1.50 of that goes to the city of New York and $4.35 is taxed by the state of New York. It is clear these administrations will see a hindrance with the deficiency of these sales of raising the age.

The bureau has also decreased tax revenue loss to the United States by regulating online cigarette sales. The passing of the Jenkins Act has played a crucial part in the monitoring of online cigarette sales. The Jenkins Act requires any person who sells and ships cigarettes across a state line to a buyer, other than a licensed distributor, to report the sale to the buyer’s state tobacco tax administrator. The act establishes misdemeanor penalties for violation. Compliance with this federal law by cigarette sellers enables states to collect cigarette excise taxes from consumers. However, some state and federal officials are concerned that as internet cigarette sales continue to grow, particularly as states’ cigarette taxes increase, so will the amount of lost state tax revenue due to noncompliance with the Jenkins Act (Wikipedia, 6).

Specifically, they discuss the effects excise taxes, which is the tax paid by the seller. In this particular case, cigarette distributers are going to be affected by this Tabaco increase initiative. This article also contributes to a better understating of hidden taxes and the reasons behind tax changes. Joey corner also explains how the local or state government can be benefited through the collection of excise taxes.

We have all been there in line waiting to purchase something from the store; we step up for our turn take out money that we believe should be enough only to find out that we forgot to count in the taxes and now have to dig into our purse, wallet or pocket to find the extra change, or in some cases dollars. There is a joke that there are a few things we are guaranteed in life, taxes and death. While it may be a joke it holds a fair amount of truth, depending on where you live. Taxes are everywhere “invisible” or obvious taxes, but lets focus more closely on the taxes involving cigarettes. To me as a non smoker it makes sense and I am for it, taxes help the governments budget and other areas. However one must begin to wondered the effects taxes on one of the biggest markets in the United States have, for those who do smoke and those who enjoy an, excuse my banter, but live shaver.

11. The United States imposes substantial taxes on cigarettes but not on loose tobacco. When the tax on cigarettes went into effect, the demand for home cigarette rolling machines most likely

History has proven that government penalties, in the form of taxes, deter smoking. The 2000 U.S. Surgeon General’s Report, Reducing Tobacco Use, found that raising tobacco-product prices decreases the prevalence of tobacco use, and tobacco tax increases produce significant long-term improvements in health. From its review of existing research, the report concluded that raising tobacco taxes is one of the most effective tobacco prevention and control strategies (7). Along with price increases, mass-media campaigns and smoking bans have made cigarette smoking pretty much unacceptable in today’s society. “Today, approximately 22 percent of adults age twenty-two and older are smokers, compared with 33 percent in 1979” (Thorpe 1440). It is clear, from these examples, the use of penalties to deter the unhealthy behavior of smoking is a successful intervention.

The excise duty rate on cigarettes is increasing to $21.56 per 200 cigarettes from $21.03. For alcohol, the excise duty rates are going up two per cent

Tax implications and its effect on alcohol consumption were studied in detail in working paper 8962. This study was done in Canada. What the writer found was that higher tax rates for cigarettes wouldn’t stimulate alcohol consumption as a replacement habit. When smuggling was factored into the equation, it was found that in Canadian smuggling could have increased both cigarette and alcohol consumption.

Tobacco industries are categorized as oligopolies. Oligopoly, according to McConnell Brue Flyyn’s textbook, is “characterized by multiple firms, one or more of which will produce a significant portion of industry output.” Tobacco had been present in Indonesia since the 1600s. It was brought in to Java Island by Portuguese merchants. At first, Indonesia’s cigarettes were handmade at home. They were rolled and wrapped with cornhusks, but that was a long time ago. The Indonesian tobacco industry today is characterized by the dominance of big three tobacco companies---Gudang Garam, Bentoel, and Sampoerna. These

Tobacco products: The FDA’s Center for Tobacco Products directs tobacco merchandise and superintends the implementation

That is the only reason why cigarettes are legal. The government makes billions of dollars a year from selling cigarettes. About 25% of the cost of a pack of cigarettes goes to federal and local revenue. They

excise taxes1. There has been recent interest in increasing the “sin tax” for products such as

Tobacco is one of the world's dangerous drug which is haunting human lives to death. Over a billion adults are addicted to this drug and wasting their money, time and health. Nowadays there has been an ongoing debate/discussion among many people about the role of government in restricting the usage of Tobacco and thereby safeguarding the health of the public. In my personal opinion, both government and the Individual together needs to work to overcome this problem.

There are many cities who have implemented bans on cigarettes, but China overall is still the leading consumer of cigarettes in the world. A countrywide tax on cigarettes has been proposed to their Ministry of Finance, and Ministry of Economics and Trade, but a decision has yet to be made. Tobacco production provides substantial revenue to the government and a tax increase will have a significant effect on the central government and reduction of consumption of cigarettes. According to a study done by the group proposing the tax, “a 25% tax increase will have an overall monetary benefit that far exceeds the negative impact on the cigarette industry and tobacco farmers. In financial terms alone, not counting the number of lives saved and medical care cost savings, the gain of the central government tax revenue (24.58 billion Yuan) twice exceeds the loss of tobacco farmers’ earnings, tobacco industry workers’ earning and loss of industry and local government revenue (11.74 billion Yuan)” (Hu TW 107). There many components to this calculation, but some factors included the reduction of cigarette consumption, the number of lives saved, savings in medical care costs, gains in productivity due to avoidance of premature death, industry revenue lost, lost jobs in cigarette industry, loss of tobacco income, and loss of local government

Cigarettes is produced to satisfy the growing population of smokers. Smokers are hooked to a substance called nicotine that is in a cigarette along with other harmful substances. Cigarette is a great product to be selling for the firm. As the customers(smokers) are addicted to nicotine , these firms can rely on them for continuous demand and they can easily increase supply. Therefore, the firms can easily monopoly the market and fix their own price.