THE TOBACCO industry has criticised a tax hike of five per cent over inflation on its products, which will cost smokers 37p more per pack of 20 cigarettes.
Local shopkeeper and Tobacco Retailers Alliance spokesperson John Abbott highlighted tobacco smuggling, more underage people buying on the black market and corner shops closing down as “negative knock-on effects” from a rise in tobacco taxation. The smuggled tobacco market costs the Treasury £8.2m a day, he added. But the Treasury said the tax hike will bring in an extra £70m this year, £50m next year and £50m in 2014-2015.
Chancellor George Osborne refrained from heaping extra taxes on the drinks industry but backed the alcohol duty escalator – which increases tax by two per cent above inflation – implemented by the Labour government. The Treasury expects to roll in an extra £125m in 2013-2014 and then £250m a year after that from this tax.
Heineken managing director Stefan Orlowski called the duty very bad news for the nation’s great beers and pubs.