The Ministry of Finance announced on Friday that cigarette smuggling in Taiwan increased 55.3% year-on-year in the first half of 2017. It attributed the surge in illegal tobacco product imports to new legislation that raised taxes on cigarette sales by NT$20 (US$0.66) per pack.
The ministry pointed out, however, the tax revenue from tobacco and alcohol sales plus health benefits donations increased 38% from the same period last year to NT$50.7 billion (US$1.67 billion). The tax revenue accounted for about 4.1% of total tax revenue in the first half of the year.
The value of the smuggled cigarettes is estimated at NT$350 million (US$11.5 million).
There were also 740,000 liters of smuggled alcohol products in Taiwan during the period, valued at about NT$46 million (US$1.5 million).
Between 2014 and 2016, 61% of legal sales of tobacco products in Taiwan during the first half of the year were domestically produced. An average of 1.91 billion packs of cigarettes were sold annually during the period.
An average of 760 million liters of alcohol per year were sold during the same period, with 66% being domestic products.
An average of NT$80 billion in tax revenue from alcohol and tobacco products and health benefits donations was collected each year between 2014 and 2016. It accounted for 3.6-4.4% of Taiwan’s total tax revenue.