HONG KONG – A pilot scheme launched by Hong Kong Customs on Monday to test the use of laser labels on duty-paid tobacco products aims to curb the sale of untaxed cigarettes in the city.

Under the three-month pilot, local manufacturers is affixing a green-colored trial duty stamp to each retail package of cigarettes during the manufacturing process to help distinguish duty-paid cigarettes from illicit, untaxed ones.

Additionally, customs officers at the Customs Duty Collection Offices at designated border control points will apply a blue-colored trial duty stamp to each unopened retail cigarette package once full duty payment has been made.

Participation in the pilot scheme is voluntary, according to a statement released by Hong Kong Customs.

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The program seeks to simulate the workflow and related technology in practical operations to evaluate their effectiveness and feasibility and to promote industry and public awareness of the key features of the duty stamp system.

The Tobacco Control Legislation (Amendment) Ordinance 2025 requires local tobacco manufacturers and importers to ensure that every retail cigarette package sold or supplied in the market bears a valid duty stamp.

The Customs and Excise Department plans to implement the first phase of the duty stamp system in the fourth quarter of 2026, with full implementation expected by the second quarter of 2027.

Hong Kong has witnessed a huge rise in cases involving illicit cigarettes, with customs reporting an 80-percent increase in related cases last year, and a 94-percent rise in passengers carrying cigarettes over their duty-free limits, according to official data.

During a local radio program in January, Commissioner of Customs and Excise Chan Tsz-tat said that customs seized 1.26 billion illicit cigarettes over the past two years. In 2024, 610 million illicit cigarettes were confiscated, which were worth HK$2.7 billion ($345.6 million).