Budget 2005: Tobacco tax and smuggling



Friday 11 March 2005

ASH Media Briefing:Friday 11th March 2005
ASH and 13 other public health bodies, including the British Heart Foundation, Cancer Research UK and the Royal College of Physicians, call on the Government to raise tobacco taxes at least in line with inflation in their 2005 Budget submission. [1] The Government’s policy of maintaining a high level of tax as part of its strategy to reduce smoking in the UK is welcomed. However, ASH warns that the Government must do more to tackle smuggling and is calling for a review of Customs & Excise’s strategy on smuggling to see how it can be made most effective.

The submission recommends the following policies:

Tax

·         Tax on cigarettes should be raised by at least the rate of inflation.

·         Increases should be on the specific tax element as far as possible to ensure that the price of the cheapest tobacco is increased proportionately more than that of higher priced brands, so discouraging trading down.

·         Hand rolling tobacco (HRT) – the tax rate should be increased at least in line with cigarettes, to discourage trading down.

Smuggling

·         The National Audit Office should review HM Customs & Excise strategy on tobacco smuggling and how it can be improved in line with the legally binding Philip Morris agreement with the European Union.

·         The UK should sign up to the EU agreement with Philip Morris and join with the European Anti-Fraud Office (OLAF) and other EU Member States in the case against RJ Reynolds and Japan Tobacco for money laundering.

·         Now that the Framework Convention on Tobacco Control has come into force, work needs to start on developing a smuggling protocol. The UK should work on this collaboratively with the EU.

In addition to the above, the health groups repeated their call for an independent nicotine and tobacco regulatory body to regulate all nicotine products and for better collection and reporting of market data.

Deborah Arnott, Director of the health campaigning charity ASH, said:

“The Government should stick to its strategy of raising tobacco taxes to reduce smoking but must do more to tackle smuggling to avoid the tax policy being undermined. It is scandalous that nearly £2 billion in tax revenue is still being lost through tobacco smuggling each year.”

ENDS

Notes and links:

[1] Link to full ASH Budget submission 2005 (pdf)

 

Contact: Deborah Arnott 020 7739 5902 (w) 079 7693 5987 (m) ISDN available