Asked by: Paul Holmes (Conservative - Hamble Valley)
Question to the HM Treasury:
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 - Chief Secretary to the Treasury
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.
Asked by: Paul Holmes (Conservative - Hamble Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to page 42 of the Institute of Fiscal Studies' report entitled The outlook for the public finances in the new parliament, published on 10 October 2024, if her Department will make an assessment of the potential implications for its policies of the Office for Budget Responsibility's estimate of the impact of the generational smoking ban on revenue from tobacco excise duty by 2060.
Answered by James Murray - Chief Secretary to the Treasury
The Government is committed to delivering its two key objectives on tobacco duty; to raise revenue and protect public health. High taxes reduce the affordability of tobacco products and supports the Government’s objective to reduce smoking prevalence.
The Tobacco and Vapes Bill will be the biggest public health intervention in a generation – tackling the harms of smoking and paving the way for a smoke-free UK. Alongside the Bill, DHSC will publish an impact assessment which will include an estimate for the impact on tobacco duty receipts.
The Government has consulted on proposals for a Vaping Products Duty. This would seek to discourage non-smokers and young people from taking up vaping and to raise revenue. The responses to this consultation are being reviewed and we will respond in due course.
As with all taxes, the Government keeps tobacco duty rates under review during its Budget process.
Asked by: Paul Holmes (Conservative - Hamble Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether her Department has made an assessment of the potential implications for its policies of the Institute of Fiscal Studies' finding relating to tobacco excise duty outlined in paragraph 10, page 3 of its report entitled The outlook for the public finances in the new parliament, published on 10 October 2024.
Answered by James Murray - Chief Secretary to the Treasury
The Government is committed to delivering its two key objectives on tobacco duty; to raise revenue and protect public health. High taxes reduce the affordability of tobacco products and supports the Government’s objective to reduce smoking prevalence.
The Tobacco and Vapes Bill will be the biggest public health intervention in a generation – tackling the harms of smoking and paving the way for a smoke-free UK. Alongside the Bill, DHSC will publish an impact assessment which will include an estimate for the impact on tobacco duty receipts.
The Government has consulted on proposals for a Vaping Products Duty. This would seek to discourage non-smokers and young people from taking up vaping and to raise revenue. The responses to this consultation are being reviewed and we will respond in due course.
As with all taxes, the Government keeps tobacco duty rates under review during its Budget process.