From: ThisIsBath.co.uk
Government plans to introduce minimum alcohol pricing and plain cigarette packaging could create a smugglers’ charter and flood the West Country with illegal tobacco and alcohol, according to a new report.
Campaign group the Taxpayers’ Alliance say that according to the latest figures, £28.5 billion of tax revenue has been lost to the illicit market in spirits, beer, cigarettes, hand rolling tobacco and diesel between 2005-06 and 2009-10.
It says this would have funded a 1p cut in the basic rate of income tax.
According to the latest HMRC Measuring Tax Gaps report, the trade in illicit spirits makes up 11 per cent of the entire market and one in six cigarettes smoked in the UK do not have excise paid on them.
Matthew Sinclair, director of the Taxpayers’ Alliance, said: “Punitive proposals based on higher duties and prices – such as the minimum unit price for alcohol introduced under the Government’s Alcohol Strategy – are likely to exacerbate this problem over time. This means that when the Treasury considers increasing duties on these products they risk boosting the illicit trade and losing the Exchequer revenue without meeting public health objectives. Plain packaging for cigarettes is also worrying because it would make it far more difficult for consumers and shop keepers to identify illicit products. This could result in not only a loss of tax revenue but also greater use of unregulated and potentially more harmful products.”
Of the £28 billion in lost tax revenues some £12.2 billion was lost to the illicit trade in cigarettes; £6.4 billion was lost in diesel; £4.5 billion was lost in hand rolling tobacco; £3.2 billion was lost in beer; £2.3 billion was lost in spirits.
Reports of fake or illegally smuggled alcohol and tobacco hitting shops in the West have risen in recent years.
Thousands of illegal Jin Ling cigarettes were seized in Gloucester last year. They are believed to contain dangerous chemicals, including asbestos.
And last November the Daily Press reported the case of a Somerset businessman who was jailed for his part in a plot that contaminated thousands of bottles of supermarket vodka with lethal ingredients.
The gang produced fake vodka diluted with bleach on an industrial scale from a rural warehouse called “Moscow Farm”.
Officers seized 9,000 bottles of fake vodka – branded as Glen’s – manufacturing equipment, bottles and counterfeit packaging, at the remote industrial unit. Her Majesty’s Revenue and Custom’s estimate the exchequer missed out on £1.5 million of revenue due to that scam alone.
Bristol-based Imperial Tobacco has long campaigned for lower taxes to make smuggling less attractive.
It said: “Our international experience reinforces our concern that excessive tax increases by governments fuel the growth of illicit trade.
“Smuggling and counterfeiting benefits no one except the criminals involved
