20 percent excise duty increase aims to curb smoking
Smokers in Singapore will now pay significantly more for cigarettes after the Government implemented an immediate 20 percent increase in tobacco excise duties under Budget 2026.
Immediate 20 Percent Duty Increase
Prime Minister and Finance Minister Lawrence Wong announced on Feb 12 that tobacco excise duty will increase by 20 percent with immediate effect. The measure applies to cigarettes, cigars, and all other tobacco products.
The Government said the move is aimed at discouraging tobacco consumption while reinforcing public health efforts. Tobacco taxation has long been used as a tool to reduce smoking rates by making products less affordable.
Higher Cost Per Cigarette
Following the adjustment, smokers will now pay 58.9 cents per cigarette, up from 49.1 cents previously, according to the Ministry of Finance. The increase translates into a noticeable jump at the retail level.
For example, a packet of Marlboro cigarettes that previously cost about $15.60 could now rise to approximately $17.74. The revised pricing took effect immediately after the Budget announcement.
Revenue Impact And Fiscal Contribution
The Ministry of Finance estimates that the 20 percent hike will generate about $150 million in additional revenue annually. Tobacco duties have consistently been a significant source of government revenue.
Between 2022 and 2024, annual collections from tobacco duties exceeded $1 billion each year. In 2024, revenue reached $1.11 billion, compared with $1.02 billion in 2023 and $1.11 billion in 2022, according to figures cited in a 2025 parliamentary response by Senior Minister of State for Finance Jeffrey Siow.
Part Of A Broader Tax Strategy
The latest increase follows a 15 percent hike in 2023, which was expected to generate about $100 million in additional revenue annually. The continued adjustments signal a calibrated approach that balances fiscal needs with public health objectives.
By raising excise duties progressively, the Government reinforces its commitment to discouraging smoking while ensuring that tobacco remains heavily regulated and taxed.
Public Health And Behavioral Impact
Higher tobacco prices are widely regarded as one of the most effective measures to reduce smoking prevalence, particularly among younger individuals and lower-income groups who are more sensitive to price changes.
While the tax hike increases government revenue, policymakers have consistently framed the measure primarily as a health intervention. The immediate effect is clear: smoking in Singapore has become more expensive overnight.
Long-Term Fiscal Sustainability
Tobacco duties remain a stable revenue stream, contributing over $1 billion annually in recent years. However, as smoking rates decline over time, the Government may see gradual shifts in consumption patterns.
The latest adjustment reflects Singapore’s broader fiscal discipline, where targeted tax measures are used to shape behavior while supporting sustainable public finances.
Singapore’s 20 percent tobacco excise duty increase underscores a dual objective of safeguarding public health and strengthening fiscal resources. By making cigarettes more expensive, the Government reinforces its long-standing anti-smoking stance while generating additional revenue to support national priorities. For Indonesians monitoring regional tax trends and Singaporeans adjusting to higher living costs, the move highlights how fiscal policy continues to shape everyday consumer behavior.
Sources: Straits Times (2026) , Yahoo! News Singapore (2026)
Keywords: Lawrence Wong, Tobacco Excise Duty, Marlboro Price, Ministry Of Finance, Government Revenue
