Tobacco: Excise Duties
The question
To ask the Chancellor of the Exchequer, with reference to the Institute of Fiscal Studies' finding relating to the fall in revenues from tobacco duty over the last decade, outlined on page 42 of its report entitled The outlook for the public finances in the new parliament, published on 10 October 2024, what steps she is taking to help tackle the illicit and non-duty paid markets for tobacco.
Answered by James Murray
HM Revenue and Customs (HMRC) launched its first strategy to tackle illicit tobacco in 2000. This, and consequent strategies with Border Force, have reduced the overall tobacco duty tax gap from 21.7% in 2005/6 to 14.5% in 2022/23.
During this time, the duty gap for cigarettes has reduced by a third, and for hand-rolling tobacco by a half.
In January this year HMRC and Border Force published their latest illicit tobacco strategy, ‘Stubbing Out the Problem’. The government is committed to reducing the trade in illicit tobacco with a focus on reducing demand, and tackling and disrupting the organised crime groups behind the illicit tobacco trade.
The strategy is supported by £100 million of new smokefree funding over the next 5 years to boost existing HMRC and Border Force enforcement capability.
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