Does smuggling negate the impact of a tobacco tax increase?

The tobacco duties of Hong Kong on is governed by the Dutiable Commodities Ordinance with just few exceptional circumstance. 2 3 The analysis below is based on data obtained between 2009 and 2010, and examines the impact of the first increase in tobacco tax in Hong Kong in 8 years. 4 Table 1 provides cigarette duties, 5 duty on each cigarette, 2 6 number of cigarettes taxed, market share of smuggled cigarettes 7 and number of cigarette sales in Hong Kong in 2009 and 2010, to determine the effect of an increase in tobacco tax in this time period (Subject to round up/down).