Research On Tobacco Excise Tax System In China

The social cost of tobacco consumption is very significant, so the government should strengthen regulation of tobacco consumption. As the only means of economic regulation, Tobacco consumption tax can play a role that other regulatory measures can not match. Although the Chinese government has been stepping up efforts to tax tobacco control, problems still exist in tobacco consumption tax system. Many countries in the world set tobacco excise tax from the perspective of promoting smoking cessation, but our tax system settings are not fully consistent with the target. Or promoting cessation of tobacco is not the main objective of the tax system settings in China. It depends on the attitude of the government that we should or not reform tobacco consumption tax system to increase the tobacco tax. China's tobacco industry is the state monopoly. Increasing the consumption tax has a positive effect on people's health and government revenue, but has a negative effect on tobacco companies and the industry. Government must balance between the positive and negative effects.Smoking is a major hazard to human health, but this is not the Government's economic basis for tobacco control.To provide theoretical support of the government's tobacco control,this paper analyzes the economic basis of government in tobacco control:incomplete information in tobacco consumption behavior, huge spillover costs, unreasonable preference in tobacco consumption. Then the paper introduce the concept of consumption tax on tobacco and its operating mechanism. The aim is to answer why the tobacco excise tax can reduce tobacco consumption. Finally, basing on introducing the current situation of domestic and international tobacco excise tax, this paper analysis the problems of tobacco consumption tax system and put forward reform proposals. The main conclusions contains:First, prices in the transparency of cigarette excise tax collection is low. The consumption tax is not conducive to play the role of rational consumption behavior. We should change the price in cigarette excise tax collection for tax excluded in price. Second, the current mixing method on tax collection is not scientific. Ad valorem tax price is difficult to determine, and there is lag, all that make it easy form a tax loss. we Should change the present method of tax collection to that in which advalorem duty is main and quantity tax is subsidiary. Third, the tax sharing system, the current cigarette excise tax revenue allocation method likely to cause local corporate executives in this region of tobacco intervention and protection. Tobacco consumption tax reformed into a central and local share tax is a more reasonable choice; Fourth, Lower rates of tobacco consumption in China, should continue to increase cigarette excise taxes and implement differentiated from the amount of fixed rate;Fourth, although a lot of harm at home and abroad has been the emergence of low, less social cost alternative to cigarettes, but tobacco consumption tax system has turned a blind eye, it should be as soon as possible substitute for cigarette tax incentives to encourage research and production of low tobacco companies against tobacco products; Fifth, China's tax incentives on cigarette substitutes, benefits and alternatives to tobacco consumption tax earmarking system is essentially blank at present, the Government should introduce relevant policies as soon as possible to encourage the tobacco industry research, production, guaranting low harm tobacco products and tobacco control funding for public health spending on schedule and in full.