Dutch MPs Alarmed About Dwindling Tax Take

Dutch lawmakers are growing concerned about dwindling tax receipts as legal tobacco consumption plummets in the wake of higher tobacco duties, reports DutchNews.

In April, the price of cigarettes increased to more than €11 ($12.14) per pack, a figure that includes €7.80 in taxes.

According to the finance ministry, tobacco sales fell 40 percent in June and 30 percent in July and August, causing the government to miss its revenue targets.

“The government’s forecast of a €400 million increase in taxes threatens to become a loss of €100 million,” tobacco retail group NSO said.

Figures from the regional statistics office suggest some 35 percent of tobacco products consumed in the Netherlands are not bought there. Government research last year showed 25 percent of discarded cigarettes packs originated abroad.

Research by the public health institute RIVM also indicates that smokers buy around 10 percent of their tobacco abroad, either importing it themselves or asking others to do so.

Members of the pro-countryside party BBB called on the finance minister to confirm whether the tax figures are accurate. “If that is the case, we have to reverse the tax increase,” said Member of Parliament Henk Vermeer.

In July, customs officials seized 6 million cigarettes and 4.5 tons of rolling tobacco at Rotterdam port. If seized product had been sold officially, it would have generated €3.9 million in tax income, officials said.