Third consecutive increase in tobacco taxes an invitation to illegal traffickers
MONTREAL, April 18, 2013 /CNW Telbec/ - By increasing taxes in its 2013 budget, the government of Manitoba has ignored the most pressing tobacco issue in Canada: contraband tobacco sales.
"We sympathize with the unique situation the Manitoba government is facing and the need to finance flood infrastructures. However, continuing to increase taxes on tobacco products is a risky approach," says Caroline Ferland, vice president, Corporate and Regulatory Affairs. "The government thinks increasing tobacco taxes is an easy way to fill its coffers. But instead, this third consecutive increase could result in fueling the black market in tobacco."
With a $17 per carton increase over the past three years, and the highest tobacco taxes in Canada, Manitoba has seen a booming black market tobacco as evidenced by the millions of cigarettes seized in just a few months. Yesterday's announcement will invite tobacco traffickers west from their strongholds in Ontario and Quebec.
"Unless the government takes very strong measures against contraband tobacco, Manitoba will not reap the financial benefits it expects as the consumers will move to unregulated and untaxed tobacco as it is the case in the neighboring province of Ontario," added Ms. Ferland.
With more than 350 smoke shacks, Ontario and Quebec are Canada's top untaxed tobacco markets. It is estimated that Ontario loses $500 million in tax revenue every year because of untaxed and unregulated tobacco while Quebec's estimates are at $225 million.
SOURCE: IMPERIAL TOBACCO CANADA
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