BACCY TAX
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Criminal smuggling of tobacco products will continue as long as British prices are substantially higher than those on the Continent (CM18-24 May).
The one sure way for the Chancellor to tackle illegal bootlegging is by reducing the duty on UK fags, thereby removing the profit for smugglers and the incentive for ordinary shoppers to take advantage of the 'common market'.
By pressing on with further punishment of smokers through extortionate levels of taxation, he is rejecting not only the advice of the government's smuggling 'czar' to reduce the duty levied on tobacco, he is also ignoring the experience of Sweden—where the government eventually cut duty on tobacco to combat smuggling—and of Hong Kong, where a tax freeze was recently introduced to tackle a similar problem.
Mistakenly, the UK Government continues to believe that its absurd policy of more Customs officers, better scanning facilities and longer prison sentences remains the only way to deter smugglers. Yet Gordon Brown could destroy the black market overnight if he was prepared to do the unthinkable and reduce taxation to European levels.
Instead, the Treasury is losing £2.bbn a year in unpaid duty and the flood of cheap tobacco means that it is increasingly accessible to both adults and children. One expects politicians to be dogmatic, but Gordon Brown is proving to be a grade one ostrich on this. Talk about a political own goat Martin Ball, Forest Campaign Director, London SW?.