Government Hemorrhaging Tax Revenue Ahead of Tobacco Ban
While Reeves claims “difficult decisions” are coming up on tax and spend, the Labour government’s insistence on pushing through Sunak’s tobacco ban is already destroying billions of Treasury revenue. Data shows a quarter of the entire police budget is being lost every year thanks to the growing black market. Prohibition strikes again…
New research by market information firm Circana, combined with ONS data, shows that spending on illegal tobacco in 2023/24 was a whopping £5.7 billion. That’s a figure which has ballooned from £4.2 billion the year and only £3.5 billion in 2020…
HMRC’s analysis of the black market is optimistic. It suggests that in 2022/23 7% of ready-made and 33% of rolled cigarettes were illicit, putting the revenue loss at £2.2 billion. Seeing as last year’s black market was worth £5.7 billion and tobacco is taxed at about 75%, £4 billion in tax revenue has in fact been foregone. At this rate the swollen black market is draining Treasury coffers at a significantly faster rate than predicted – which means the money will have to come from elsewhere…
