PUNITIVE tobacco taxes have blown a £1.4 billion black hole in Treasury coffers, as smokers turn to black market cigs.
Last year, a significant amount of £3.1 billion in excise tax from various products was lost to individuals engaged in smuggling, counterfeiting, and selling illegal goods in the UK. This trend is observed as more British consumers opt for unofficial outlets to purchase low-cost, questionable items.
That’s enough cash to pay the wages of over 60,000 nurses or hand out Winter Fuel Payments to every pensioner in the UK.
The biggest tax gap came from fags, followed by beer, which had hole of £700m.
Imperial Brands’ representative, Stephen Rooney, expressed deep concern over these statistics, highlighting the substantial and expanding illegal tobacco market in Britain. This underground economy is causing the government to lose billions in tax revenue annually.
The continuous increase in tobacco taxes has not resulted in a decline in smoking rates but has, instead, driven consumers towards the unlawful black market where taxes are evaded altogether.
One in four fags in the UK now comes from the black market, where a pack can cost as little as £5, over three times cheaper than a legal pack of Marlboro Gold in British supermarkets.
In just three years, duty-paid cigarette sales have plunged nearly 45 per cent, from 23.6 billion in 2021 to just 13.2 billion now.
Rolling tobacco sales have also been slashed almost in half.
Yet smoking rates aren’t falling and have instead crept up in some parts of England for the first time in nearly 20 years, according to University College London research.
Reform Deputy Leader Richard Tice said: “Hard working Brits, feeling the squeeze in their pockets, are turning to under the counter options, and who can blame them?
“The government’s tax policy is pricing them out of legitimate goods.
“Labour chooses not to partner with above board businesses, but with organised criminal gangs instead.”
