Total Consumption fell by 1.5% and was estimated at 5.0 billion cigarettes in 2017. Of this, an estimated 28.6% or 1.4 billion cigarettes were illicit.
Illicit Consumption rose by 2.5% in 2017, while Legal Domestic Sales declined by 2.0%.
Hong Kong has a relatively small passenger duty-free personal import allowance for inbound arrivals, equivalent to 19 cigarettes per person. However, given the proximity to China and high volume of passenger traffic, Hong Kong is subject to a large volume of Non-Domestic Inflows.
The majority of illicit Inflows in 2017 consisted of China market variant products and Duty-Free labelled products.
The Tax Loss associated with Illicit Consumption in fiscal year 2017/18 amounted to HKD 2.8 billion (USD 356 million).
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