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Taiwan To Double Health Tax On Cigarettes

by Mary Swire, Tax-News.com, Hong Kong

14 April 2009

Taiwan's Department of Health (DoH) will double the health surcharge levied on tobacco products in just under two months' time, it has announced.

As of June 1, the health surcharge levied on tobacco products will rise from the current rate of TWD10 (USD0.29) to TWD20 (USD0.58) per packet of cigarettes.

DoH Minister, Yeh Ching-chuan, explained that the increase is a double-edged attempt by the government to raise capital for the country's health insurance program and encourage individuals to quit smoking.

Mr Yeh has estimated that the measure could stand to generate an extra TWD16bn (USD471m) in revenue for the government's health insurance reserves - although this will depend largely upon how many smokers abandon their habit in the wake of the move.

The government is set to spend around TWD10m (USD294,500) implementing the scheme over the next few weeks.

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