Chancellor urged to help ‘just about managing’ smokers by ditching tax that hits the poorest
The Minimum Excise Tax proposed by George Osborne in the last Budget sets a minimum rate of tax on fags and will see cheaper brands have to hike their prices
PHILIP Hammond is being urged to help “just about managing” smokers by ditching a George Osborne backed tax that hits the poorest hardest.
The Minimum Excise Tax proposed by the ex-Chancellor in the last Budget sets a minimum rate of tax on fags and will see cheaper brands have to hike their prices, but premium brand cigarettes unaffected.
Now newsagents up and down the country are urging the Chancellor to ditch the hike during Wednesday’s Autumn Statement.
More than 500 newsagents and shopkeepers have put their names to letters calling on Mr Hammond to scrap the levy.
Jayesh Patel from Classic News in Northampton told The Sun: “Most of our customers only have a small amount of disposable income and I know many of them who smoke are often tempted to turn to the black market for tobacco given the high prices they face in shops.
“Introducing a Minimum Excise Tax for tobacco will only drive more customers away from our shops and to the criminals who run the black market.”
He went on: “This will lead to closure of small shops and businesses, who are the life blood of the UK economy and at the heart of the community.
"I would think this will only reduce income for the local council and government.”
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Accountants KPMG concluded that if MET were to be introduced then the Treasury could lose £1.2 billion in revenue by the end of this parliament.
The research conducted for British American Tobacco comes on top of the HMRC’s own figures that show the amount of tax lost due to tobacco smuggling has already increased to £2.4 billion from £1.8 billion.
Cigarette prices in the UK are already among the highest in Europe due to taxation and it was estimated that at least £5 billion illegal cigarettes were smoked in the UK last year.
The Treasury refused to speculate on what the Chancellor might have up his sleeve ahead of Wednesday's statement.
But a spokesman said: “As announced in March, the government is introducing a minimum excise tax as part of Finance Bill 2017 to tackle the cheapest cigarettes and support public health.”
