Retailers Seek Reassurances on Tobacco Tax Reform

ACS has called on Ministers to provide reassurance about tackling the illegal tobacco trade in face of proposals to introduce a new minimum excise tax for tobacco.

The proposal would seek to ensure that the cheapest tobacco on sale in the retail sector yields a higher tax take per pack. This so called ‘minimum excise tax’ is in place in most EU states and is being proposed following an unexpected decline in tobacco tax revenue in 2013/14.

In its response to the consultation, ACS has called for minimum excise tax to only be introduced if it is accompanied by a new approach to tobacco excise policy that focuses on reducing the market for non-UK duty paid tobacco. This includes an end to the annual tobacco duty escalator and a new strategy for targeting those selling illegal tobacco in the community.

ACS Chief Executive James Lowman said: “The fact that tobacco tax yield declined for the first time in the last financial year is an important signal that we need a new approach to tobacco taxation. The policy of dramatically increasing tobacco tax every year is fuelling an illegal trade that is damaging thousands of legitimate retailers. If Ministers decide to go ahead with a minimum excise tax then they must do so alongside a new strategy focused on reducing the supply and demand for illegal tobacco products.”

ACS has also responded to a London Health Commission Report on public health published today, welcoming calls to tackle the illicit trade in the capital. In the report, the Commission recommends that London should ‘launch a fresh crackdown on the trafficking in and selling of illegal tobacco.’

Mr Lowman continued: “The Commission’s report highlights successful campaigns in other areas of the UK to tackle the illicit trade, and recommends that more should be done in London to stop the illegal sale of tobacco. We welcome the Commission’s focus on this area, but it must be matched by authorities throughout the UK to make a significant impact on a market that costs the treasury over £1billion annually.”

The full submission is available on the ACS website. The London Health Commission’s report is available here


This entry was posted by Chris on Wed, 15/10/2014 - 12:21