Hong Kong’s Tobacco Tax Increase Sends Shockwaves Through Global Cigar Market

How can a tobacco tax change in a small part of the world, as Hong Kong is, have an effect on a worldwide scale? Simple, last year, Habanos, the worldwide distributor of Cuban cigars, created a global price policy where the cigar price in Hong Kong would be the benchmark for the global Habanos prices. So the new 31.5% increase on cigar tax is bad news for the lovers of Cuban cigars worldwide.

Hong Kong taxes tobacco by weight, and the new rate is now 3.288 HKD up from 2.455. That makes Hong Kong more expensive than Singapore, another country with a very high tobacco tax based on weight. Only a few countries, including Australia and New Zealand, tax tobacco higher than Hong Kong after the latest increase.