Stat of the Month: £2.2bn

The lost duty on illegal cigarettes

Last Updated: 09 Oct 2013

The illegal tobacco trade is giving the Government a headache. Cigarette smuggling costs the Exchequer £2.2bn a year in lost revenues. There has been some success in clamping down - more than 20 billion smuggled cigarettes and 2,700 tonnes of rolling tobacco have been seized in the past decade, HM Revenue & Customs claims. The market share of illegal cigarettes has also shrunk from 21% to 10% in Britain.

But there are fears, mainly stoked by tobacco companies, that the black market trade could be about to rise again. Tax on cigarettes is due to increase by 5% in April. That's on top of the 76% tax that makes up a typical packet of cigarettes. The Government is also considering plain packaging for tobacco products later this year. The aim is to discourage people from lighting up, but critics say the proposals will fuel the black market trade as people search for cheaper alternatives, which may be even worse for their health than the real thing. It's one problem that's difficult to stub out.

Source: HMRC

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