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UK to impose tax floor to raise price of cheap smokes

09 Mar 2017. The government in its 2017 budget announcement unveiled a minimum tax on cigarettes from 20 May to raise the cost of low priced brands popular with young smokers.

The minimum duty of GBP 268.63 per 1,000 cigarettes in the budget presented by Chancellor Philip Hammond equates to about GBP 5.37 for a pack of 20. It will take effect on the same day as plain packaging rules that remove branding from tobacco products and mandate a uniform brownish-green colour for surfaces not covered with health warnings.

“Tax on some of the lowest priced cigarettes already accounts for 90 per cent of the price,” said Giles Roca, director general of the Tobacco Manufacturer’s Association. Noting UK tobacco taxes are the highest in the EU, Roca said the impact on the tobacco market as a whole was uncertain but, “today’s move will simply encourage people to buy from the black market.”