On 19 February 2018, the Budget for 2018 was presented to Parliament by the Finance Minister. The Finance Minister, Heng Swee Keat, earlier the same day during the nation’s annual Budget speech announced that the Government will impose a 10% increase in tobacco excise duty to discourage tobacco consumption in Singapore and subsequently protect its citizens from its devastating health consequences.
This measure is also in line with the requirements of Article 6 of the WHO Framework Convention on Tobacco Control, ratified by Singapore on 14 May 2004. Figures cited in the Guidelines for Implementation of Article 6 of the WHO FCTC detail that (based on an average income elasticity of demand of 0.5) a 10% increase in the price of cigarettes will result in a 5% decrease in consumption.
Excise tax is a duty on manufactured goods levied at the moment of manufacture, rather than at point-of-sale. It is an indirect tax that governments deploy expecting companies to increase the price of the final product.
According to the Singapore Customs website, cigars, cheroots and cigarillos are now taxed at S$388 per kilo. This will increase to S$427 from 19 February 2018.
