State Administration of Taxation (SAT) released a report on taxation of the first half year of 2015. National Business Daily noticed a figure that shows the consumption tax on cigarettes during wholesale rose from 5 percent to 11 percent since May 10, 2015, and also added 0.005 yuan on each cigarette. From June, the cigarette wholesale process had collected 6.34 billion yuan, an increase of 118.13 percent over the same period. Together with the added consumption tax on each cigarette of 580 million yuan, the taxation on cigarettes has collected 4 billion yuan in total.

The price on cigarette wholesale has increased by 6 percent, as well as the retail price. The average retail price of each pack of cigarettes has risen from 11.74 yuan to 12.82 yuan. And according to the statistics, from May 10 to May 31, the sales volume of cigarettes during the wholesale process has fallen by 15.9 percent, realizing both goals of smoking control and tax revenue increase.

It is analyzed that with the increase of tax on cigarettes, the cigarette demand and consumption is expected to drop, hence it will lead to the reduction on yield, and people’s demand of cigarettes.