No UK Tax on Tobacco Manufacturers

The British government has decided they will not introduce a tax on manufacturers and importers in the tobacco industry.

From an examination on what a levy could mean, they realised the additional costs would only be paid by tobacco customers rather than the manufacturers and importers themselves.

Last year, the government revealed they were going to consider introducing a new tax because of the profits the tobacco industry make and the social impacts caused by smoking.

Action on Smoking and Health revealed an estimation of how much smoking costs in the UK in the December 2014 consultation by HM Treasury.

They calculated £2 billion is spent on the NHS to treat smoking diseases, £3 billion lost caused by premature deaths, £1 billion spent by smoking-related sick days from work and other costs that lead to further billions.

In their 2014 proposal, the British government hoped to regain money from the tobacco industry. They said: “Tobacco manufacturers and importers benefit from the activity that imposes these costs on society. For this reason, the government believes it is fair to ask tobacco manufacturers and importers to make a greater contribution towards these costs.”

From their discussions this year, they eventually concluded the levy would not produce many fiscal benefits.

“Analysis of the responses shows that the impact of a tobacco levy on the tobacco market would be similar to a duty rise, with tobacco manufacturers and importers passing the levy onto consumer prices,” the government cited in their review.

“As tobacco duties have already increased this year and will continue to increase by more than inflation each year in this parliament, the government has decided not to introduce a levy on manufacturers and importers.”

In their consultation the government reviewed what a new tax could provide for the UK. They realised a levy would not provide much profit. If they introduced a levy of 150 million pounds on tobacco importers and manufacturers they would only receive 25 million pounds.

This discussion is another addition to the current debates and plans for the future of the tobacco industry.