Budget Reaction: Hammond Hammers Small Tobacco Retailers

Responding to today’s tobacco duty increase, Suleman Khonat, spokesperson for the TRA said:

“The decision to raise tobacco duties for the second time this year is a hammer blow for the nation’s shopkeepers and a massive own goal by the Government. It will simply drive more and more customers to the illegal market and allow organised criminals to prosper at the expense of hardworking legitimate retailers. This year has already seen the imposition of plain packaging and the ban on smaller tobacco packs, the last thing the Chancellor should have done is raise tobacco duties for the second time. These politicians don’t seem to live in the real world, they need to properly engage with small businesses to understand the impact of these changes rather than relying on their dodgy spreadsheets.”

Notes

· May 2017 : the full introduction of standardised ‘plain’ packaging of cigarettes and hand rolling tobacco
· May 2017 : the complete ban on cigarette packs of less than 20 and hand rolling pouches of less than 30gr
· March 2017 : Budget increased tobacco duties by 5.9%
· May 2017: Introduction of Minimum Excise Tax (MET) impacting on brands priced below £7.35
· October 2017: HMRC’s Measuring Tax Gaps Report revealed an increase in the revenue lost to the illicit tobacco market - £2.5bn
· October 2017: TRA analysis revealed that a typical small shop loses around £34k a year in sales to the illegal tobacco market
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