Jia Lissa
In a comprehensive set of recommendations aimed at the Ministry of Health and Welfare (MOHW) and the Ministry of Finance (MOF), tobacco industry stakeholders and regulatory experts have issued a formal call for the Taiwanese government to adopt a more transparent, evidence-based, and predictable approach to tobacco control. The proposals, which come amid significant shifts in the regional regulatory landscape, emphasize the need for scientific justification in additive prohibitions, a gradualist approach to tax and surcharge adjustments, and a robust, cross-ministerial strategy to combat a surging illicit market. These recommendations arrive at a critical juncture for Taiwan’s public health policy, as the Health Promotion Administration (HPA) continues to refine the implementation of the Tobacco Hazards Prevention Act (THPA), which underwent major amendments in early 2023.
The Push for Science-Based Additive Regulations
The primary concern raised by the industry involves the HPA’s ongoing development of a draft list of prohibited tobacco product additives. While the industry has publicly stated its support for the HPA’s overarching public health objectives, there is growing apprehension regarding the methodology used to select prohibited substances. The industry argues that for any regulatory framework to be effective and credible, it must be grounded in sound scientific evidence and implemented in a manner that provides market stability and practical feasibility.
Current draft lists have drawn criticism for failing to distinguish between additives introduced to alter flavor profiles and substances that occur naturally within the tobacco leaf itself. Furthermore, some additives are utilized in microscopic quantities during the manufacturing process to maintain product consistency and quality, without imparting any detectable flavor. Industry representatives warn that a blanket prohibition on such substances, without clear scientific justification, could undermine the enforceability of the regulations and penalize lawful manufacturers for the presence of inherent botanical compounds.
To address these concerns, the industry recommends the establishment of a transparent scientific review and risk assessment mechanism. This mechanism would ideally define clear scientific criteria, standardized testing methods, and objective enforcement principles. Furthermore, stakeholders are urging the HPA to clarify that these regulations should not apply to tobacco products manufactured in Taiwan solely for export. As a long-standing hub for tobacco manufacturing, Taiwan’s export-oriented facilities contribute to the national economy without impacting domestic public health. Failure to exempt export-only products could unintentionally cripple these manufacturing activities, shifting production to other regional competitors without achieving any domestic health benefit.
Chronology of Tobacco Regulation in Taiwan
To understand the current friction between regulators and the industry, it is essential to trace the timeline of Taiwan’s tobacco control measures over the last decade.
In 2009, Taiwan implemented a significant increase in the Tobacco Health and Welfare Surcharge, which saw the levy rise to NT$20 per pack. For over a decade, this rate remained relatively stable, providing a predictable environment for both the government’s health programs and the legal market. However, the landscape changed dramatically in January 2023, when the Legislative Yuan passed major amendments to the Tobacco Hazards Prevention Act. These amendments expanded the scope of regulation to include heated tobacco products (HTPs), raised the legal smoking age to 21, and introduced stricter bans on flavored tobacco products.
Throughout 2024, the HPA worked on the technical implementation of these amendments, particularly the "Flavor Ban," which sought to eliminate additives that appeal to minors. By early 2025, the discussion shifted toward the fiscal side of tobacco control, with government officials and public health advocates suggesting a further increase in the health and welfare surcharge to fund national healthcare initiatives. This 2025 proposal has become the catalyst for the industry’s current call for "gradual and predictable" fiscal adjustments, as stakeholders fear that a sudden price hike will drive consumers toward the burgeoning black market.
Addressing the Fiscal Impact and Market Stability
The second major pillar of the industry’s recommendations focuses on the Tobacco Health and Welfare Surcharge. As the government seeks to balance public expenditure and maintain fiscal resources for the National Health Insurance (NHI) system, the prospect of a surcharge hike has become a point of contention. The industry’s position is not an outright rejection of tax increases, but rather a plea for a "reasonable, gradual, and predictable" approach.
Economic data suggests that abrupt tax increases often lead to "price shocks," which can cause unintended market distortions. One of the most significant risks is the incentivization of illicit trade. When the price gap between legal, taxed products and illegal, untaxed products widens too rapidly, consumer demand tends to shift toward the latter. This not only undermines public health goals—since illicit products are not subject to any quality control—but also results in a net loss of tax revenue for the state.
To mitigate these risks, industry experts suggest that any adjustment to the surcharge should be preceded by a comprehensive impact assessment. This assessment should evaluate the current capacity of enforcement agencies to handle a potential spike in smuggling and analyze the stability of the tax base. A phased implementation, rather than a one-time sharp increase, would allow the market to adjust and help the government maintain a steady stream of revenue for its welfare programs.
The Rising Tide of Illicit Tobacco
The most pressing operational challenge identified in the recommendations is the sharp increase in illicit tobacco activity. Data provided by the National Treasury Administration of the Ministry of Finance paints a concerning picture: in 2025, authorities seized 13.82 million packs of illicit tobacco products. This represents a significant jump of approximately 2.61 million packs compared to the 2024 figures. Experts suggest that these seizure numbers are merely the tip of the iceberg, as the true scale of the illegal market remains difficult to quantify due to sophisticated smuggling routes and unreported cases.
The emergence of heated tobacco products (HTPs) has further complicated the enforcement landscape. Because HTPs involve both electronic devices and consumable sticks, they do not fit neatly into the traditional enforcement categories used for combustible cigarettes. Frontline personnel in customs and local police departments are now tasked with distinguishing between legal HTPs that have passed the HPA’s Health Risk Assessment (HRA) and illegal, unauthorized versions of the same technology.
This complexity has led to the industry’s third recommendation: the strengthening of cross-ministerial coordination. Currently, enforcement is fragmented among the Ministry of Finance, the Ministry of Health and Welfare, the police, and customs authorities. The industry proposes a centralized coordination mechanism to integrate intelligence sharing, real-time reporting, and risk analysis.
Proposed Solutions for Enhanced Enforcement
To combat the evolving illicit market, the industry has outlined a multi-faceted strategy for the government:
- Specialized Training Programs: Frontline enforcement officers require institutionalized training specifically focused on new tobacco categories. This includes the ability to identify genuine vs. counterfeit labeling, understanding the logistics of HTP supply chains, and recognizing the digital patterns of illicit online sales.
- Technological Integration: The use of digital tracking and tracing systems, along with enhanced data-sharing platforms between central and local governments, would allow for faster identification of illicit hotspots.
- Regular Transparency Reporting: The industry calls for the regular publication of detailed seizure statistics, including data on raw materials and manufacturing equipment seized. This transparency would help build public trust and provide a clearer roadmap for where enforcement resources should be allocated.
- Local Government Engagement: While central authorities set policy, local governments are responsible for post-market monitoring. Strengthening the coordination between these two levels of government is essential for effective inspections of retail points and the prevention of illegal distribution networks.
Implications for Public Health and National Revenue
The implications of these regulatory decisions extend far beyond the tobacco industry. If the government adopts a science-based and predictable framework, it stands to protect national tax revenue while simultaneously achieving its public health goals. A stable legal market ensures that products are tested, labeled correctly, and sold only to adults. Conversely, a regulatory environment characterized by sudden changes and lack of scientific clarity could inadvertently fuel a black market that operates entirely outside the reach of the law.
Furthermore, the "Taiwan model" of tobacco regulation is often watched by other jurisdictions in East Asia. By establishing a transparent, risk-assessment-based mechanism for additives and a coordinated enforcement strategy for new product categories, Taiwan has the opportunity to set a regional benchmark for modern tobacco control.
In conclusion, the industry’s recommendations serve as a call for a "balanced approach." By prioritizing scientific evidence in additive bans, ensuring fiscal predictability in tax policy, and modernizing enforcement to meet the challenges of the 21st-century tobacco market, the Taiwanese government can ensure that its public health policies are not only well-intentioned but also practically effective and economically sustainable. As the HPA and MOF consider these suggestions, the focus remains on creating a regulatory environment that serves the interests of public health, market order, and national fiscal stability.
Siti Muinah
Asro
