Autumn Budget: TRA Calls on Chancellor to rule out further tobacco tax hikes
For immediate release
With a the Autumn Budget confirmed for the 22nd November, the Tobacco Retailers’ Alliance (TRA), the group that represents thousands of independent tobacco retailers, is today calling on the Government to:
1. Rule out further increases in tobacco tax this year;
2. Repeal the heavy-handed tobacco regulations that threaten to put them out of business and cost the Treasury billions of pounds of tax revenue;
3. Rule out further regulations such as retailer licensing that would add to the regulatory burden and hurt their businesses and tax revenues.
In its submission to the Treasury ahead of the Autumn Budget the TRA has emphasised the following facts:
Tobacco remains an important part of small retailers’ businesses
• Tobacco sales remain a vital part of small retailers’ business models and continued viability;
• Tobacco products promote high footfall (over a quarter of all shop visits are to make a tobacco purchase ) and have stable and predictable demand;
• Tobacco purchasers also tend to buy additional products alongside their tobacco which brings revenues for the shop and the Treasury.
• That thousands of small retailers continue to sell tobacco shows how important it is to their businesses. This includes the only retailer in the country who the tobacco control lobby can persuade to say that tobacco isn’t an important part of his business .
Tobacco retailers have been unfairly hit in the last year
• Tax has already been raised once in 2017.
o Years of above-inflation tax increases has raised the amount of tax paid on a pack of 20 cigarettes by around 65% since 2010 and 90% of shopkeepers say tobacco taxation is excessive
• Minimum pack sizes (introduced fully in May 2017 a part of the EU’s Tobacco Products Directive) have greatly reduced footfall for small retailers.
o Oxford Economics has estimated it will cost retailers £1.5 billion in revenue and over 11,000 jobs and the Treasury £2.1 billion of tax revenue
• Mandatory plain packaging has made the counterfeiting of tobacco products much more easy and as a consequence it is much easier to make, smuggle in and sell illegal tobacco products.
• 60% of retailers in a TRA survey said that these new tobacco pack regulations were having a detrimental impact on their business.
o Despite this, only 32% of TRA members were given help by the Government to understand their new obligations.
Suleman Khonat, National Spokesperson for the TRA said:
“We know that the raft of changes introduced this year including scrapping small packs and plain packaging together with sky high taxes on tobacco are badly affecting many independent retailers. Yet despite these restrictions, tobacco remains a fundamental part of their businesses.
“Raising tobacco taxes even further would put at risk the existence of 50,000 small businesses, the 370,000 jobs that they create and billions of tax revenue because it simply pushes smokers to buy from the black market. We’ve already had one increase this year, to have a second in the space of a few months would be catastrophic for independent stores, that’s why we are calling on the Government to rule out any further increases.”