Tobacco: Excise Duties
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of tobacco excise duty policy on the size of the illicit tobacco market.
Answered by James Murray
Tobacco duty aims to both raise revenue and reduce harm to public health by discouraging smoking. In 2024/25 tobacco duty raised almost £8 billion. High duty rates, making tobacco less affordable, have helped reduce smoking prevalence with the percentage of adult smokers in the UK decreasing from 26% in 2000 to 11.9% in 2024.
Strong enforcement is essential in tackling the illicit tobacco market. HM Revenue and Customs and Border Force have had illicit tobacco strategies in place since 2000.
Whilst tobacco duty has been progressively increased over time, successive illicit tobacco strategies have proven effective in tackling the size of the illicit tobacco market, reducing the tobacco duty tax gap from 21.7% in 2005/6 to 13.8% in 2023/24.
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