UK taxes too high

Eighty-six percent of UK adult smokers believe that tobacco prices are too high, while 56 percent agree that rising prices tempt them to buy untaxed tobacco, according to the results of a survey commissioned by the UK’s Tobacco Manufacturers’ Association (UKTMA).
The survey of more than 12,000 adult smokers in the UK found that more than three-quarters regularly avoid UK taxes by buying tobacco from the black market, abroad or duty free.
It found that the number of smokers who avoid paying UK duty now stands at an all-time high, a finding that the UKTMA says supports HM Revenue and Customs analysis that untaxed and illicit tobacco remains a problem throughout the UK.
‘Moreover,’ the UKTMA said in a press note, ‘the findings confirm that adult smokers are being pushed towards non-UK-duty tobacco by high tobacco taxation, the introduction of plain packaging and the recent ban on minimum tobacco pack sizes.’
The key findings of the survey were said to be:

• ’76 percent of adult smokers buy untaxed tobacco at least once a year – this can be from legal sources such as at duty free but also includes illegal sources such as from people in the pub or in street markets.’
• ’16 percent of adult smokers spend more than £1,000 on untaxed tobacco every year.’
• ’28 percent of smokers agree that plain packaging tempts them to buy untaxed tobacco.’
• ’37 percent of smokers agree that minimum pack sizes tempt them to buy untaxed tobacco.’
• ‘The average price for a pack of 20 illegal cigarettes is just £4.33 – almost half the typical legitimate UK price.’
• ‘London (85 percent) has the highest prevalence on non-UK duty paid tobacco purchases with Wales having the lowest (70 percent).’
• ’86 percent of adult smokers believe that tobacco prices are too high and 56 percent agree that rising tobacco prices tempt them to buy untaxed tobacco.’
• ’64 percent of adult smokers would support the re-introduction of duty free tobacco shopping from the EU post Brexit even if it was limited to 200 cigarettes or 250 g roll your own tobacco.’

‘These findings reinforce the concern that the illicit tobacco trade is continuing to be a major problem,’ the press note said.
‘Valued at £2.5 billion in 2016-17 by HRMC, the illicit tobacco trade reduces tobacco tax revenues, brings crime into communities, costs jobs and impacts legitimate business, particularly independent retailers.
‘The TMA recommends that, post-Brexit, the UK introduces fixed limits on personal tobacco imports to end the option for smokers to bring unlimited amounts of cheap tobacco back from the EU. This would reduce the opportunity for criminals to buy tobacco, claiming it is for personal use and then selling it on illegally.’
Giles Roca, the director general of the UKTMA was quoted as saying that the survey, now in its fifth year, had shown that the issue of untaxed tobacco was becoming an even greater problem across the UK.
“Smokers cite price as the chief reason for avoiding duty and with tax making up 90 percent of the price, combined with two duty increases in 2017 we can see the direct impact that the Government’s taxation policy is having,” Roca said.
“This survey also shows that the introduction of plain packaging and the ban on small packs of tobacco in the last year are also contributing to making the problem of untaxed tobacco purchases worse and encouraging smokers to buy from illegal sources.
“The Government needs to undertake a full review of its approach towards tobacco as their policies are contributing to this illegal activity, which affects local communities, public finances and small business.”