From: TheStar.com
Treasurer takes aim at Ontario’s ‘underground economy’ to find $700M
Finance Minister Charles Sousa sets sights on the “underground economy” — in particular, contraband tobacco — with the hope of reeling in additional tax revenue over the next four years.
By: Robert Benzie Queen’s Park Bureau Chief
Finance Minister Charles Sousa is taking aim at the “underground economy” with hopes of bringing in an additional $700 million to the treasury over the next four years, the Star has learned.
Sousa will use Monday’s fall economic statement to announce a new push by the cash-strapped Liberal government to clamp down on contraband tobacco and tax cheats.
“We’re going after contraband tobacco,” said the official, who spoke on condition of anonymity in order to freely discuss policy changes that will not be made public until Monday afternoon.
With an estimated 40 per cent of the cigarettes smoked in Ontario being untaxed because they are manufactured on First Nations reserves and then illegally distributed throughout the province, the Liberals are expected to step up enforcement.
Over the past six years, some 235 million contraband cigarettes have been seized by police.
So they are going to spend more money on enforcement again?
Haven’t the nanny governments learned anything?
The more you extreme tax, the more goes underground, and the more police/lawyer/prison spending.
Govenments should take a cue from big business, volume is where the profit is.
Walmart, the most profitible company on earth, doesn’t do it by getting the most profit (tax) per item, it does it by selling lots with less markup (tax).
Increasing tobacco tax has not solved anything, more policing will not solve anything.
The costs of extra policing is not covered by the few people that “go legit”, nor by the fines on those caught.
California is considering raising tobacco taxes to make for the revenue losses after the last tax increase. See here, http://www.thecre.com/cc/?p=4466