Smoking ban backfires on taxman
EVERY family in Britain will face an extra £20 on its tax bill next year as a result of the smoking ban which will extend to the whole of the UK from today.
Treasury figures show ministers expect the ban on smoking in public places, which comes into force in England today, to lead to a £500million fall in tobacco duties next year as millions of smokers cut down on their habit or kick it altogether.
The predicted black hole in the Government’s finances is equivalent to £20 for every household in the country.
Some experts believe the true cost to new Chancellor Alistair Darling could be even higher if smokers stand by their threats to desert their local pubs, but the Treasury is predicting that alcohol tax revenues will remain roughly the same.
The scale of the predicted losses underlines the value of tobacco taxes to the Treasury, which raises £8billion a year from duty on cigarettes – equivalent to more than 2p on income tax.
Anti-smoking campaigners claim the smoking ban will lead to big savings for the National Health Service. But Simon Clark, director of the pro-smoking group Forest, said the Treasury forecasts highlighted the massive amount of tax smokers paid.
He said it would be impossible to claw back the losses by raising tobacco duty further since this would only encourage smuggling.
Mr Clark said: “Maybe they feel they can handle losses of £500million, but they will have to find the money somewhere. It will be very interesting to see how they play it if the losses get much higher, because the uncomfortable fact is that smokers pay a lot of tax.”
