The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

A tobacco retailer yesterday expressed concern that the Government’s plan to impose a ‘per stick’ duty rate on cigarettes and cigarillos could cause persons to bring them in “under the table”.

Prime Minister Perry Christie said yesterday that the Excise Tax will move from an ad valorem rate based on value to a specific 15 cents per stick, “to counter fraudulent Customs declarations and disincentivise sub-standard imports that could have more damaging health consequences”.

The existing rate stands at 220 per cent of value, but Philip King, owner of Smoker’s Haven, told Tribune Business: “That’s way out of hand. That’s basically $3 a pack. That’s $30 on each carton because 10 packs come in a carton.

“That’s not going to work out. They’re going to have a lot of bootlegging going on. You can buy a pack of Rothmans for $35.50, a pack of Malboro Red for $38, or a pack of Newports for $41.

“People are going to bring them in under the table and the Government still isn’t going to make that money. They should just put it at a certain price where the people would pay their duty and the Government would get their money without  people dodging around anything, but when you put it too high the people will dodge around it.”

Mr King added: “I deal with cigars mainly. The tax on cigarettes is so high you don’t really make any profit on it. I buy them right here from, say, the Chinese. You might make $10 off the carton, spend $35 and make $10 profit. The persons you buy from are going to go up on their price.”

Mr Christie noted yesterday that the new Excise Stamp Control Act, which was recently passed by Parliament, provides for the stamping of all tobacco products, whether imported or produced domestically, upon the payment of the appropriate Excise Tax.

“This measure will significantly reduce the smuggling of tobacco products and provide considerable benefit in terms of reducing revenue leakage. By January 1, 2014, the system will be fully operational, with a transition to the use of excise stamps beginning later this year,” said Mr Christie.