Korean Government Doubles Cigarette Prices Amid Fiscal Deficit

Cigarette Prices to Increase from ₩2,500 to ₩4,500 in Anti-Smoking Plan Aimed at Cutting Smoking Rate to 20% By 2020

The average smoking rate for male adults is 37.6 percent, compared to 24.9 percent among OECD nations.  The price per pack of cigarettes in South Korea is 2,500 won, compared to an average of 7,000 won for OECD members.

The average smoking rate for South Korean male adults is 37.6 percent, compared to 24.9 percent among OECD nations. The price per pack of cigarettes in South Korea is ₩2,500, compared to an average of ₩7,000 for OECD nations.

The government has decided to raise the cigarette price by ₩2,000 with the aim of reducing the current smoking rate to within the 20 percent range. Critics denounce it as an indirect tax hike to make up for the fiscal deficit. Smokers standing against the new proposal heralds a bumpy road for the proposed hike passing through parliament.

On September 11, the government decided to raise the cigarette price to ₩4,500 from the current ₩2,500, a price that has remained unchanged over the past decade. Under the new plan, tobacco prices are pegged to consumer prices, and are expected to rise steadily.

The proposed hike, the government claims, is aimed at cutting the smoking rate but there is growing suspicion that the hike in cigarette price is designed to levy more taxes to make up for the government’s fiscal deficit, as the hike includes increased taxes and various duties.

The government’s actions are justifiable from the perspective of protecting public health, but critics say that the tobacco price increase is an indirect tax.

Specifically, critics see the government’s proposal as pushing to increase one of the “sin taxes”–referring to taxation on liquor, and tobacco, instead of increasing direct taxes, like corporate or income taxes. Increases on these direct taxes have been strongly opposed. This critical view heralds the difficulty of the bill’s passage in parliament.

On Sept. 11, the government announced the anti-smoking policy in a meeting attended by economic ministers, and hosted by Finance Minister and Deputy Economic Premier Choi Kyung-hwan. They decided to raise the current cigarette price from ₩2,500 to ₩4,500.

Minister of Health Moo Hyung-pyo said in the meeting, “The nation has an alarmingly high smoking rate, and in particular the youth smoking rate is close to the average smoking rate for adults in other OECD nations. This leads to societal issues including premature deaths and financial problems. The government aims to slash the present smoking rate of 37.6 percent to within 20 percent by 2020 by using pricing and non-pricing methods.”

Mr. Moon has long contended that a significant drop in the smoking rate would be possible if cigarette prices were increased ₩2,000 to ₩4,500, but the Finance Ministry has proposed a ₩1,500 increase in consideration of a possible adverse impact on the working class. The government adopted Mr. Moon’s suggestion in its new anti-smoking policy.

The cigarette prices in South Korea are the lowest among advanced nations, while its smoking rate is among the highest.

A tobacco regulatory committee affiliated with the European Union conducted a survey of prices of the most popular cigarette brands in the 22 member nations of the Organization for Economic Cooperation and Development (OECD). The survey showed South Korea had the cheapest price at ₩2,500 per pack.

The result is the same when the survey reflects inflation-adjusted prices. In addition, when it comes to the proportion of taxes reflected in tobacco prices, South Korea’s 62 percent is well below the the World Health Organization (WHO) recommended 70 percent.

Aside from increasing the price, the government has also decided to prohibit designs and phrases that encourage smoking from being attached to cigarette packs, and is placing big warning labels on the packs.


The hike in the cigarette prices is projected to bring about a 34 percent decrease in tobacco sales when the price elasticity of cigarettes is calculated to be 0.425, generating about ₩2.8 trillion in extra tax revenue, and leading to a 0.62 percent point rise in consumer prices.

A survey shows opinions about the proposed cigarette price hike

A survey, conducted Sept. 16-17 for 1,050 adults nationwide, shows that the public is divided over what motivated the government to propose a ₩2,000 increase in the cigarette prices. 39.4 percent said the hike is for the purpose of tax collection, while 33.2 percent said the new plan is aimed at protecting public health. 23.0 percent said the government seeks to attain both goals.

Comments From Daum :


The government acts like a thief, seeking to fill the fiscal deficit by extracting money from ordinary people’s pockets. Protecting public health is important, but the government would do well to scrap the previous tax reduction for the wealthy.


Double the price of soju. Booze-related crimes are increasing. Increase the oil price to ₩5,000 per liter. Emissions from too many cars on the streets are giving us lung cancer.[…]


If the government is truly protecting public health, quadruple the current cigarette price, or stop tobacco production. In the end, this is just for collecting more taxes.


Wouldn’t they use taxes generated from the hike in cigarette price to make up for the deficit from pension funds for public officials? [All South Korean citizens are required to subscribe to state pensions. But unlike retirement pension for ordinary people, the pension program for public servants is criticized for receiving generous fiscal assistance from the government.]


The price hike will kill poor and disadvantaged people in our society.


The government claims the smoking rate of our nation is among the highest, but the smoking rate for adults, including females, drops to sixth among the 19 OECD nations. It also contends that Korea has the cheapest cigarette price in the OECD nations, but it is not cheap compared to our per capita income or minimum wage.

A Korea Tobacco and Ginseng employee grabs a handful of cigarettes for packaging. The tobacco manufacturer has been a private company since 2002.

A Korea Tobacco and Ginseng (KT&G) employee grabs a handful of cigarettes for packaging. The tobacco manufacturer has been a private company since 2002.

Comments From Naver:


When the liberal president Roh Moo-hyun announced a ₩500 increase in cigarette price, the head of the main opposition Grand National Party [which is the predecessor of the current Saenuri Party] said during a Blue House meeting with President Roh, “Soju and cigarettes are favored by the working class. The price hike is making people depressed.”


When the nation has a minimum wage that’s less than half [of the average for OECD nations], if the cigarette prices have to become equal [to that of OECD nations], doesn’t it equal stealing money from the working class?


I bet that the smoking rate will drop. People around me bitterly say that they’d quit smoking.


I am for it. Smoke from cigarettes on streets brings nothing but harm and is damn irritating!


For the sake of our children’s health, we should quit smoking. What will we pass on to our children? Smoking???”>


Am I alone in thinking that a staggering number of working hours and ultra-high intensity of work has made the smoking rate higher?


The hourly pay remains the same in South Korea, but cigarette prices are made to be similar to that of foreign countries.

Share This Article
Help us maintain a vibrant and dynamic discussion section that is accessible and enjoyable to the majority of our readers. Please review our Comment Policy »
  • Jahar


  • Chucky3176

    It’s about time. But at 4 bucks a pack is still too cheap. They need to increase to at least $15 a pack, then use the money for welfare policies. They should also do the same to alcohol. One thing I could never understand Korean government, is that there are so many ways to increase tax revenues like drastically increasing the sin taxes, and drastically increase the traffic fines. Yet, they don’t do it. They probably only care about protecting large cigarette manufacturers, tobacco farmers, alcohol manufacturing companies, bars, clubs, and room salons. Jobs could be lost in those sectors, but the savings to the society in the form of saving medical insurance costs and lost productivity is far bigger, while at the same time allowing the government to pay for increasing social welfare programs.

    • Ro

      The prices shouldn’t be too low but if it’s higher than OECD average, then it might do more harm than good. UK has the highest price on tobacco due to tax and apart from the similar rate of decline in smoking as recorded in other countries without the high tax, it has a big problem with illicts which was increasing demand the blacket markets and profiting the gangs. The ‘sin’ tax from tobacco already far outstrip cost of health spending on smoking related problems and yet it still increases each year because govt use it as a cash cow and such taxes always hit the poor hardest because the rich tend to travel abroad more often and bulk buy cheaper ones. Also smoking increase during bad times, like recessions and in poorer areas, so the best long term solution to smoking is actually to increase livelihoods and education of people and maybe ban public area smoking to reduce second hand smoking, but then again this doesn’t make govts extra money or help avoid taxing the rich. My opinion based on local news in the UK.

    • Rutim

      Welcome in the world where people will be buying cheap Chinese ciagrettes because they won’t stop smoking. They won’t get more money from the tax as less people will buy those and money will only start flowing slower, never reaching the previous state. I can already see some big mansions being built from contraband money by some smart mafia guys.

  • Sum Ting Wong

    Cool. Now people will start smuggling cigarettes from places like China.

    • Chucky3176

      Probably. But at least the availability will be limited to underground market. That will be too much hassles for lot of people who can’t just walk into any store and buy it. They’ll either pay the tax or quit smoking.

      • Ro

        Not unless it becomes profitable enough for shop keepers to sell illicts under the counter to regular customers, like it’s happening now in high tax countries. I think in those countries half of the consumptions are in the illict markets. So you might see less sales from legal manufacturers reported each year, but doesn’t necessarily mean a decline in smokers. For most smokers, smoking is a hard addition to just ‘quit’ despite what they first say, especially when they see their life style decline, many would seek illicts first and cut back other spendings before quit forever. I don’t disagree with your suggestions, but I’m just very cynical when another govt increase tax on products that relates to the disadvantaged in society apparently for ‘their good’ when taxes for the rich decrease overtime.

        • 금정산

          Undercover agents can solve the “under the counter” issue. Hefty fines for the practice.

          Raising taxes is a way to slowly wean people away from smoking.

          • freakanomics

            what a load of crap. obviously never taken econ101 or heard of price elasticity. this policy is nothing but a money grab. it will not alter smoking patterns whatsoever.

          • 금정산

            You say it will not alter smoking patterns whatsoever, but the studies have been very consistent in proving that raising cigarette taxes have curbed smoking rates across OECD countries, time and time again. There is enough literature out there if you don’t believe me.

          • BSDetector

            Yes because studies are never presented in ways to support the opinions which caused the study to be conducted in the first place. OECD is a time-honored excuse used by governments to pass crap legislation in the name of competitiveness.

            I just conducted a study of what percentage of people find your argument to be junk, the result was 100%. There you go, a legit study that proves my point. You want literature too cause I can whip something out in paint pretty quick.

          • 금정산

            It’s good to be skeptical. The studies I am talking about are from academia and non-governmental. I did a quick search and found a plethora of studies with robust research methods. I can show you if you like. Got any citations yet?

          • BSDetector

            So how will they pay for this increase in infrastructure that’ll be required to monitor legal sales? More people, equipment, vehicles, training, offices, utilities. How long before it’s yet another self-serving government office?

          • Chucky3176

            If it was up to me, I would ultimately treat smoking to be same as drug offenses. Illegalize smoking and outlaw it as a drug trade. Strengthen the punishment, same punishment as smoking crack. Then pump more money and resources to the anti-drug squads, against smuggling and drug running. That would be the ultimate goal, after lot of people quit and become more and more used to restrictions. Just slowly and gradually strangle this nasty habit by making it more difficult and expensive, then bam! One day the illegal smoking law gets put in place.

          • BSDetector

            That you can say this in the face of the monumental failure that is the war on drugs just reinforces my opinion that you’re either trolling or stupid. People like you are a nasty blight on the human race.

          • Chucky3176

            War on drugs maybe a failure in the West to you (you seem quite convinced about that), but not so in Korea. Drug abuse, while still rising, is very minimal, especially compared to the US.

          • Thor

            Again, it’s a crazy idea. Think about what happened with alcohol in the pre-WW2 USA. If things were as easy and obvious, governments would have banned smoking a long long time ago. But the same goes with illegal drugs. They are illegal virtually everywhere on Earth, still people keep on messing up themselves. It raises questions that are much more complicated that you might think. I’s ever say drugs in general are consubstantial to human nature.

          • 금정산

            The police infrastructure already exists. It would merely be a human resource management issue. Say, undercover police to audit 10-50 stores per week, depending on how common these sales are. Takes 10 minutes per store including paperwork. Gives another person a well-paid, respectable job and more funds for policing.

      • Ken Morgan

        You should see just how many cigarettes are smuggled in the EU with packs of cigs at £7-£8 for 20 (thats 12000 won) you can get smuggled cigarettes everywhere. People will approach you in supermarket car parks everywhere.

        • 금정산

          And do you take note of their appearance, record the licence plate number and call the police when this happens?

          • Ken Morgan

            You seem to think the police actually do anything. In the UK police won’t bother with any crime less than murders and shootings. A friend was hit by a car and ended up on the front of the car clinging to the front. Cops were too busy to attend.

          • 금정산

            The police won’t bother for anything less than a shooting? I’ve seen enough episodes of The Bill to know that isn’t true.

            I’ve called the police when men in a van approached me suspiciously trying to sell-off home theatre equipment. They came down on it pretty quick and met me at the car park. Despite what the cynics say, the police do care and work to serve the public.

            As for South Korea, there is not enough crime for the number of police officers.

          • Chucky3176

            Well, that’s the UK. In Korea, drugs have zero tolerance, so they crack down hard. It’s one big reason why Koreans don’t have the similar levels of drug abuses.

          • Ken Morgan

            From what I saw Koreans are plenty heavy drug abusers….alcohol and cigarettes.

          • Chucky3176

            That’s what I mean, treat cigarettes as a drug, similar to pot, then crack down on hard, and the attitude will change.

          • Thor

            It’s called “prohibition”, don’t you know how it ended up ?

  • A Gawd Dang Mongolian

    Course there’s going to be grumbling. It’s nicotine, they need the fix. First couple days are always the hardest.

  • Barack Obama

    they are just creating a market for black-market cigarettes.

    • BSDetector

      There’s already one, people buying smokes that are for sale on military installations through a proxy or “out the back door” because they’re tax-free.

  • Jackie Chan

    If it stops people smoking and destroying their lungs this is good.
    If it brings in taxes this is also good.

    What is the issue?

    • x1sfg

      Sounds good on paper, not good in practice. You’ll have an increase in criminal activity, and too high a tax would just result in lower economic gains that may potentially hurt the country more in the long run.

      You can raise the sin taxes, just don’t go overboard.

      • Thor

        As it is widely known, too much taxes kills tax.

    • Bryan Cheron

      Freedom means letting people decide the good for themselves (or not, if they choose). I oppose any form of nanny-statism.

      • Superman

        Bryan Cheron, the problem is South Korea provides free healthcare. Those who smoke put a much larger burden on the healthcare system, so it’s only fair that they pay an extra share towards it. The amount of tax they pay is still disproportionate to the healthcare costs.

        Raising the price also helps to reduce those costs by reducing the amount of smokers. Many people don’t smoke because they decide that it’s ‘good for themselves’, they just end up addicted. Increasing costs won’t do that, but it’ll add extra incentive to quit.

        Can I ask you if you support legalisation of marijuana, methamphetamine, or heroin? If not, why?

    • BSDetector

      The issue? No issue… here’s your plane ticket to North Korea, they like weak-minded people like yourself.

      • CIA

        FYI pot is legal there unlike in South Korea so they’re clearly doing something right!

        • Joe

          Not actually legal there. That was a rumor that has been disproved.

  • 금정산

    Ultimately smoking does nothing positive for your life. There are better ways to deal with stress. There are better ways to spend your money.

    The faux-benevolent argument that sin taxes harm the most disadvantaged is wrong. People quit smoking when it becomes too expensive for them; and I think this is a more motivating factor than quitting for health.

    South Korea is isolated and its small border means customs can guard against smugglers. The less acceptance we have for smoking, the better.

    • BSDetector

      Why do you get to decide how someone relaxes? You’re a fool if you think this is nothing other than a money grab by the government.

      • 금정산

        Well I’m not deciding anything for anyone – I get to voice my opinion on what I want to see in society.

        The reason I make the point about stress-release is that many smokers use the “smoking helps me to relax” speech without realising that the relaxation they experience is from satisfying their nicotine dependency. Also people don’t realise that stepping away from a situation and taking breathes to enlarge the lungs makes them feel relaxed.

    • commander

      If smoking is considered as social evil itself, why have governments in the world failed to ban tobacco production or criminalize smoking? Isn’t prohibition a better way to nip smoking in bud?

      And if a genuine liberal democracy means to guarantees individual freedom that entails no harm to others, the right to smoke should be respected.

      Why does the government step in such individual freedom?

      • 금정산

        Yeah, I would like to see a ban on smoking in all public areas or total prohibition for health reasons. But that is another issue.

        I don’t think people should have the freedom to harm others or foul the air.

        • commander

          If the government is a true believer in smoking being only harmful, they should push for a blanket ban on smoking, not hiking price. Thus, the price increase and a possible ban is an interrelated issue.

          I am not a smoker, and smoking has no harm to others.

          You just conintuously make a case without supporting arguments

          • 금정산

            I think you are underestimating the complexity of the situation. It’s best to wane people away from smoking because it is an extremely difficult addiction to break, established in peoples lives. A government which suddenly implements a total ban on cigarettes is performing political suicide.

            Initiatives to ultimately ban smoking would follow something like this:
            1. Raise tax on tobacco products.
            2. Government supported quit programs and nicotine replacements.
            3. Increase non-smoking public areas.
            4. Ban on smoking in public all areas.
            5. Ban the sale of tobacco to people born after a certain year.

            These initiatives require public support and revenue. We know smoking is harmful, we have long known the effects of passive smoking, but social complexities resist change. Perhaps one reason why the government cannot act is because there are fools out there who believe that smoking doesn’t harm others.

            I support my arguments when challenged. Provide a counter argument, and I will elaborate; otherwise it is tl,dr. In your previous post, you were asking loaded and rhetorical questions – which were somewhat irrelevant to my original post. I wasn’t going to follow you on that tangent, not until you explained yourself.

          • commander

            I bet such a incremental approach will be never adopted. Can you point out which country in the world have succeeded in outlawing smoking in general?

            Second, there are still many people out there who don’t think smoking is something only bringing direct harm, and smoking, if properly regulated not to cause the second-hand smoking for others, falls completely into individual freedom.

            Though smoking cause health problems for smokers, the government has no right to step in, increase the price, and ultimately ban cigarettes.

            I just made a comment because your argument to the effect that the government’s intervention is justified for public health sounds too much paternalistic.

            If such an approach is justified, the government will be likely to encroach on individual freedom.

          • 금정산

            Well Bhutan is an exceptional case. I think we will see countries which have successfully outlawed smoking in 20-40 years. I know the case of New Zealand pretty well – they have ambitious plans and have proceeded in the steps I mentioned. You could also look at the initiatives of Finland and Singapore. Stick that in your pipe.

          • Thor

            The governments use the concept of war against smoking to set a foot in the door of our individual freedoms. It’s just the same as all the rest of the politically correct things as war against road “speeding”, etc. : its purpose being to force everyone to swallow a lot of BS while lining up our pockets and sending us to jail if we don’t sheepishly follow the rule like robots.

  • Chucky3176

    South Korea needs to do this to pay off the increasing national debt, cut the budget deficit, and pay for soaring social welfare budgets for the elderly, working moms, and multicultural families. They have no choice now. Maybe Koreans should have thought about where all the money was going come from, before demanding northern European style economic policies. The more Korean economy follows the European welfare state, the more taxes the people will need to pay out, and the taxes on sin pleasures is one of them. Average income tax rate of twenty percent isn’t going to cut it, in paying for covering the deficits. Either this, or they’ll have to increase sales and income taxes which will really hurt the economy. So it’s better to hit the pleasures industries first before going after people’s incomes (that is if they don’t cut spending) later. If the underground industry arises from this, then so be it, at least the tax revenues on those who refused to quit, will help the national budget.

  • Chucky3176

    Taxes on smoking should be expanded. Like I said before, they should also increase the tax on alcohol They should also legalize prostitution and squeeze income tax out of the pimps and prostitutes. Squeeze as much taxes out of the dirty aspects of the society, before going after the working man.

    • BSDetector

      They need to divert more money to mental health care, you need some help.

    • Thor

      Governments still collect taxes from prostitutes, while not recognizing their activity as legal (except in Australia and Germany)… Talking about hypocrisy, that is.

  • Yaminah Jamison

    Eh it’s not really gonna stop people from smoking… had to be some ulterior reason for it. When there’s a will, there’s a way.

  • commander

    The most potent argument against a staggering ₩2,000 hike in the cigarette price is that the government’s ulterior intention is to create an extra source of tax revenue, unlike the ostensible cause of slashing the smoking rate and shielding public health from possible insidious diseases like lung cancer, pneumonia.

    This criticism has gain traction given President Park Geun-hye was actually a fervent opponent when former President Roh Moo-hyun pushed a ₩500 increase in the cigarette price to the current ₩2,500.

    The public suspicion that the price hike is more concerned with additional tax revenue is reinforced by the government’s announcement to raise other indirect taxes on residence and cars, a day after its plan to increase the tobacco price was unveiled.

    Another criticism comes from a more realistic aspect.

    The smoking rate of about 38 percent for male adults in South Korea which is blamed on a low price of ₩2,500 per pack is considered as alarmingly high compared to that of the OECD nations.

    But this comparison masks many uncomfortable truths: Corporate and income tax, hourly minimum wage, and social safety net is among the lowest compared to those of the OECD nations.

    Also noteworthy is the facts that South Korea has its people work the longest hours, and has a suicide rate that is among the highest in the world.

    The working class has a much higher smoking rate than the well-off is expected to bear the brunt of the price hike as poor smokers, who can’t find other substitutes for what they sees as only a stress shooter in grueling daily struggle for a living, will continue their smoking. This means the poor effectively pay more taxes in the form of indirect tax that is touted as fair for everyone, which is not after all.

    Finally, if the government has the genuine intention of cutting the smoking rate, an anticipated tax revenue from the price hike should be used in campaigns discouraging smoking. But the government has so far announced no plan about how to use the new tax revenue.

    Reducing the number of smokers is justifiable but smokers have the right to continuously smoke as long as they comply with smoking etiquette like refraining from smoking while walking or in non-smoking zones.

    With another sin tax on alcohol remaining intact, marking remarkably up the cigarette price flies in the face of taxation justice.

    This is all the more so as the low liquor price is often pinpointed as the main culprit of drunken misbehavior.

    • Thor

      Great comment as always, thanks.

      • commander

        If it helps you put things in perspective, I couldn’t feel better. :)

  • Researcher

    Ironically, the most polluted country in the world has the highest per capita of smokers in the world.


  • Sid Driver

    Yeah!!! Now only half the amount of cigarette butts outside my apartment in the morning!

  • Sid Driver

    Also, over the past few years, Korea has been ramping up their no smoking policies. I’ve seen a lot more no smoking signs around bus stops, outside of subway stations, restaurants, and around public buildings. (Of course I still see cigarette butts there but not as often.) Also where I live, sometimes I’ve seen the officers waiting outside the subway exit. They watch the person have a smoke and after they finished their smoke, hand them a ticket. (Fines are 100,000 won).

    Yes, it’s a cash grab, but taken in consideration with everything else, I think they are morning in the right direction.

    • Chucky3176

      It’s a good cash grab. If you have enough money to waste it on ruining your health, surely you have enough money left in your pocket to help out the country’s coffers.

  • cantonizi

    The fake science is working on the sheeples and people believe in govt BS now.
    Do anyone know how long one has to be near a smoker smoking to catch any sickness from 2nd hand smoke, like stand there next to a smoker for a few years and may be you get something.
    I worked in a casino and in a few bars where people smoked like there is no tomorrow but I am better than the others like most of you non smokers are.
    And for the smell, don’t fart in my face please.

  • the_menace

    if governments really wanted their citizens to stop smoking they would run free “quit smoking” support groups for people wanting to quit, and subsidize nicotine gum and patches. the price of those is insane. it’s something like 12,000-15,000 Won for a box of Nicorette gum!

  • zachary T

    I don’t smoke, but why don’t the Korean cigarette companies start exporting cigarettes? with all the Free trade agreements they have signed recently even with slightly higher prices due to shipping, Korean brands would be cheaper than domestic in the western world. The only problem in the US anyway, would be the cartel of state governments and major brands since all those court battles in the 90’s that basically funnel cigarette money into state coffers in exchange for court sanctioned monopolies.

  • aasdf

    It’s all about the vape now. Cigs are going to go out of style once vaping catches on in Asia.

  • Smith_90125

    I’ll bet some buttheads (aka smokers) are going to whine, “They’re taxing and hurting poor people! Waaaah!”

    No, they’re not. If they’re poor, why are you wasting money on cigarettes instead of food or education? And it’s not targeting the poor, it’s targeting drug addicts.

    Some reports say Austria has the most buttheads per capita in the world, but I’d have to see it to believe it. I find it hard to believe any country could be worse than South Korea and China.

  • PowerTJ882002G20

    Koreans smoke too much.

Personals @ chinaSMACK - Meet people, make friends, find lovers? Don't be so serious!»