LONDON, March 16, 2016 /PRNewswire/ --
TMA responds to the Chancellor's Budget - 16 March 2016
Responding to today's Budget announcement, Giles Roca, Director General of the Tobacco Manufacturers' Association (TMA), said:
"Raising cigarette duties by 2% above inflation and hand rolling tobacco by 5% above inflation is prolonging this failing tax policy, which according to the OBR will deliver £5.4bn less in revenue between 2014/15-2018/19. This is due to many consumers inevitably seeking cheaper products elsewhere, adding fuel to the illegal market which cost HM Treasury £2.1bn in 2014/15 alone."
"Today's announcement is compounded by the forthcoming implementation of the Tobacco Products Directive, which will see cigarette packs of less than 20 and hand rolling pouches of less than 30gr start to disappear from retailers' shelves from 20 May this year. The Government should have, at least, waited to assess the impact of these changes before raising taxes further.
Tobacco taxes increased by more than 40% over the course of the last Parliament. In 2014/15 the illicit tobacco market cost the Government £2.1bn in lost taxes, an increase of £500m on 2011/12 figures.
Example of Pre-Budget prices of cigarettes & hand rolling tobacco
Typical pack of 20 premium Hand rolling tobacco cigarettes (50gr) UK GBP 9.40 UK GBP 18.91 Spain GBP 3.90 Belgium GBP 7.00 Poland GBP 2.70
Notes to Editors:
- The TMA is the trade association for tobacco companies that operate in the UK. Our members are British American Tobacco UK Ltd (http://www.bat.com), Gallaher Ltd (a member of the JTI Group of companies - http://www.jti.com), and Imperial Tobacco Ltd. (http://www.imperial-tobacco.com)
1. OBR Economic & Fiscal Outlook 2016 v OBR Economic & Fiscal Outlook 2014
2. The Office for Budget Responsibility's (OBR) tobacco excise revenue forecasts reveal a downward revision of £5.4bn
3. HM Revenue & Customs (HMRC) 2014/15 mid-point estimates show that
Mid-point estimates of smuggling & crossborder shopping (non-UK duty paid - NUKDP) Cigarettes Hand rolling tobacco (HRT) Smuggling Crossborder Total NUKDP Smuggling Crossborder Total NUKDP 10% 3% 13% 35% 5% 40%
Mid-point estimates of revenue losses from smuggling & crossborder shopping (GBPmillions) Cigarettes + Cigarettes Hand rolling tobacco (HRT) HRT Smuggling Crossborder Total NUKDP Smuggling Crossborder Total NUKDP Total NUKDP GBP1,200 GBP400 GBP1,600 GBP900 GBP100 GBP1,000 GBP2,600
4. Further information can be found on the TMA's website - http://www.the-tma.org.uk
SOURCE Tobacco Manufacturers’ Association (TMA)