Hong Kong authorities have seized over HK$700 million ($90 million USD) worth of illicit cigarettes since the region's 31% increase in tobacco tax in February, according to a report by the South China Morning Post on May 16th.
Latest data reveal that customs enforcement officers seized approximately 191 million untaxed cigarettes during this period, estimated to be worth over HK$706 million. An insider familiar with the illicit trade suggested that, if imported legally, these tobacco products would have generated HK$477 million in tax revenue for the government.
"Customs officers made numerous seizures of a large quantity of illicit cigarettes in March and April as smuggling syndicates continued to replenish their stocks with smuggled products," the source said.
In a recent case, customs officers confiscated HK$120 million worth of untaxed cigarettes in the Tuen Mun public cargo working area. These 32 million illicit cigarettes were found in three shipping containers onboard a vessel. Two young men aboard the ship were arrested on suspicion of dealing with illicit tobacco.
Under Hong Kong's Dutiable Commodities Ordinance, the violator carries a maximum penalty of two years' imprisonment and a fine of HK$1 million. Preliminary investigations indicate that the seized goods were intended for local consumption, but the source of the contraband is still under investigation.
Hong Kong customs noted that illegal cigarettes are rarely found in the morning; most seizures occur in the evening or at night.
The 31% increase in tobacco tax in February pushed the average cost of a 20-cigarette pack to over HK$70, an additional HK$12 per pack. The price of black-market cigarettes has also risen by HK$5 per pack, with prices ranging between HK$18 and HK$30 for a pack of 20.
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