WHO recommends China tobacco tax hike

China should raise taxes on tobacco products to lower smoking rates and save lives, a World Health Organization (WHO) official said on Wednesday.

"Policy makers should substantially increase taxes on tobacco, while ensuring that the increase is passed on to the retail price of tobacco products," said Dr Bernhard Schwartlander, WHO Representative in China.

"This is the single most effective measure authorities can take to reduce the death, disease, and economic harm tobacco is causing China's society and economy," he said.

Earlier reports citing China's health authorities said tobacco consumption kills some 1 million people in China each year.

According to the WHO, a 10-percent increase in the price of tobacco products in low and middle income countries would lead to a 5 percent reduction in tobacco use.

The effects are especially pronounced among price-sensitive young people, who are expected to cut their consumption by two to three times more than adults when tobacco becomes more expensive.

In China, increasing the price of a pack of cigarettes by just 1 yuan (about 16 U.S. cents) could reduce annual consumption from 125 billion packs to approximately 100 billion packs, and generate additional tax revenue of more than 200 billion yuan, the WHO said.

"It's a win-win," Schwartlander said. "Good for people's health, and good for the economy."

The WHO's Framework Convention on Tobacco Control, which came into force in China in 2006, recommends that countries increase tobacco taxes taking into account their national health objectives concerning tobacco control.

WHO recommends that excise taxes represent at least 70 percent of the retail price of cigarettes. In China, the rate is much lower, at approximately 40 percent.