Increase in tobacco tax does not lead to increase in illicit cigarette consumption in Hong Kong: findings from a top-down approach against tobacco industry-funded results

Abstract

Background: The tobacco industry consistently and persistently exaggerates that tobacco tax increase leads to increased illicit cigarette consumption (ICC). Using a top-down approach, we found that the proportion of ICC was about 11.9% in 2012 in Hong Kong (published in Tobacco Control), versus 35.9% reported in "Asia Illicit Tobacco Indicator 2012" (funded by tobacco industry). Their updated report in 2015 showed that ICC decreased to 29.1% in Hong Kong. We re-assessed the ICC in Hong Kong, where the tobacco tax increased by 41.5% in 2011 and 11.8% in 2014. Method(s): The top-down approach was done by first estimating the total CC of local residents and visitors (top), which was based on the official data of smoking prevalence and daily CC. Then, ICC was calculated by subtracting the total CC by the legal domestic sales and the duty-free cigarettes imported personally (down). The legal domestic sales were estimated using official revenue data due to the excise duty. The legal import was estimated with three alternative scenarios of cigarettes brought in by local residents and visitors. The estimates in 2015 were validated by a population-based survey that estimated the proportion of local smokers who purchased illicit cigarettes or the cigarettes brought in from overseas personally. Result(s): The mid-point estimate of absolute ICC declined from about 412 million sticks in 2012 to 139 million sticks in 2015. The mid-point proportion of ICC in 2012, 13, 14 and 15 was 11.9% (8.2%-15.4%), 6.5% (2.7%-10.1%), 7.0% (3.2%-10.7%) and 3.9% (0.1%-7.7%), respectively. The estimates of 3.7%-6.3% obtained from the 2015 population-based survey were consistent with those from our top-down approach. Conclusion(s): The industry-funded study has largely inflated ICC in Hong Kong. ICC declined over the 4 years, supporting that increase in tobacco tax does not lead to increase in ICC.