United Kingdom - budget 2010 released - new taxes on tobacco..

March 26, 2010 - The UK Chancellor of the Exchequer, Alistair Darling, has delivered his last budget (UK Budget on 24 March 2010) before the next UK General Election. (The next United Kingdom general election is due to take place on or before 3 June 2010, barring exceptional circumstances. As a general election, it will see voting take place in all constituencies of the United Kingdom, to elect Members of Parliament (MPs) to seats in the House of Commons, the lower house of the Parliament of the United Kingdom.

Chancellor announced that tobacco duty will increase from today, March 24th by 1 percent above inflation and then increase by 2 percent in real terms each year until 2014. (Tobacco duty rates will increase by 1 per cent above inflation from today and by 2 per cent above inflation for the next four years.)

Cigarettes, 15p, packet of 20; Cigars, 6p, packet of 5; Hand-rolling tobacco, 15p,
25g; Other smoking tobacco and chewing tobacco, 9p, 25g of pipe tobacco.

Extra tax - From January 1 next year, every additional 3cm (1.18 inches), or part thereof, beyond this length will be treated as another cigarette. This means that an 11cm cigarette will be treated as two cigarettes, while a 12cm (4.72 inches) cigarette will be counted as three. The Treasury said the move was "a technical change" targeted at tax avoidance.


Action on Smoking and Health (Ash) chief executive Deborah Arnott said: "The 15p rise in tobacco tax will encourage some adults to quit but is unlikely to have as strong an impact as a price rise of 5% or more above inflation would have had.
"However, we are encouraged by the commitment to raise tobacco taxes in future years and urge whichever party that wins the general election to adopt this strategy. Raising the price of tobacco is one of the most effective ways of reducing smoking."

Tobacco Manufacturers' Association chief executive Christopher Ogden said: "On January 1 the Government imposed the largest tax increase on tobacco products in ten years and now, less than three months later, taxes are to rise again. "We question why Treasury would impose a substantial increase in such a short period, when latest HM Revenue & Customs figures show that up to 24% of the cigarette market and 63% of the handrolling market still avoids UK duty, costing the Treasury as much as £11 million per day in lost revenue. "Today's announcement will only provide further stimulus to those who seek to profit from the illicit trade in tobacco."


References: Budget 2010 - alcohol and tobacco, Published: Wednesday, 24 March 2010; Budget measures 'piling misery on pubs', Posted by The Independent by Josie Clarke, Press Association, 3/24/2010; Extra tax makes smoking long cigarettes a drag.