Customs say tobacco firms will likely have to bear the cost of an upcoming labelling system which will help consumers differentiate duty-paid cigarettes from illicit ones.

Commissioner of Customs and Excise Chan Tsz-tat explained the proposed scheme is aimed at weeding out untaxed cigarettes which boast identical or similar packaging to their duty-paid counterparts.

Both feature government health warnings, and can be difficult to distinguish even by retailers.

Chan said one way to implement the scheme is to introduce anti-forgery features on the packaging.

"The labels will be similar to anti-forgery features on banknotes, which are hard to replicate," Chan told a television programme.

"There will also be a digital tag to be scanned. The tag can be attached when the cigarettes are produced but duty has not been paid. When duty is paid, we can activate the label from the back end. Then we will know the batch has been taxed."

Chan dismissed concerns that tobacco companies will transfer the extra costs to consumers.

"Our initial thought is to have the tobacco industry shoulder the cost. Currently, a pack of cigarettes on the market is sold for over HK$100. The cost of adding labels is minimal and will have no impact on the selling price," he said.

Authorities are also looking to introduce stiffer penalties for people who flout a law on the permitted amount of cigarettes they can bring into Hong Kong tax-free.

Currently, each traveller can carry 19 sticks of cigarettes every time they enter the city.

Chan said officials are looking to amend legislation within this year, so offenders will be fined HK$5,000, up from HK$2,000.