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Date: April 29, 2024 Mon
Time: 8:49 pm
Time: 8:49 pm
Results for cigarette taxes
3 results foundAuthor: Johnson, Bryan M. Title: Report: Feasibility Study of a Cigarette Tax Stamp Program in American Samoa Summary: A recent TAO report (May 2011) found that cigarettes were likely being smuggled into American Samoa and that as a result the government of the territory (ASG) was losing a significant of amount of cigarette excise tax revenue each year. The TAO report recommended that ASG implement a cigarette tax stamp program in order to control and prevent this smuggling. In support of that TAO recommendation, a feasibility study of a cigarette tax stamp program in American Samoa was commissioned by the American Samoa Community Cancer Network, and a report on the results of that feasibility study made. In order to establish the need for a cigarette tax stamp program, the feasibility study estimated the number of cigarettes that had been smuggled into American Samoa in 2010. That estimate (based on an analysis of demographic and cigarette excise tax data) indicated that as many as 5,792,924 cigarettes had been smuggled into the territory that year (smuggling referring to both the evasion and avoidance of excise taxes), which at the territory‟s cigarette excise tax rate of $0.125 per cigarette represented a revenue loss to ASG of $724,116. According to that estimate, the percentage of revenue losses to the government of American Samoa due to cigarette smuggling in 2010 was 8.4 percent, but the study calculated that even if the percentage of excise tax revenue lost to cigarette smuggling was only 3 to 5 percent, the revenue losses in 2010 would have still ranged from $257,547 to $429,247. Therefore, the study came to the following conclusions: 1. Based on an analysis of available data as well as other evidence, it was likely that millions of cigarettes were smuggled into the territory each year and that this smuggling deprived the government of American Samoa of hundreds of thousands of dollars. 2. That the territory‟s smuggling problem would continue and was likely to become worse in the near future if the cigarette excise tax rate were to be increased, and that such smuggling would deprive the government of badly-needed revenue and pose an on-going threat to public health. 3. That the government should take immediate measures to combat the problem, including the implementation of a cigarette tax stamp program. 4. That such a program would facilitate the control and tracking of cigarettes imported into American Samoa and would be cost-effective. In support of its recommendation to implement a cigarette tax stamp program, the feasibility study‟s report: Discusses the current regulatory environment in American Samoa regarding the importation and sale of cigarettes into the territory Examines possible sources of cigarettes smuggled into American Samoa Explains what a cigarette tax stamp is and how it works Discusses how a cigarette tax stamp program in American Samoa would work and what would be needed to implement this program Estimates the costs involved in establishing this program and its potential economic benefits Discusses cigarette tax stamp programs in place in several states in the U.S. (especially Hawaii, which could serve as a model for American Samoa) The study report‟s CD also contains information on where and how to purchase and/or obtain tax stamping machines and tax stamps as well as further technical assistance (in the “Resources” file). Details: American Samoa: American Samoa Community Cancer Network, 2011. 28p. Source: Internet Resource: Accessed July 22, 2013 at: http://tiotala.com/wp-content/uploads/2012/04/AS_cig_tax_stamp_study_report.pdf Year: 2011 Country: International URL: http://tiotala.com/wp-content/uploads/2012/04/AS_cig_tax_stamp_study_report.pdf Shelf Number: 129481 Keywords: Cigarette TaxesIllegal ProductsTobacco Smuggling (American Samoa) |
Author: Furtick, Katie Title: The Effect of Cigarette Tax Rates on Illicit Trade: Lessons Learned in Canada Summary: U.S. President Barack Obama is proposing to raise the federal cigarette tax by nearly $1.00 per pack, hoping to bring in additional tax revenue to help fund universal preschool. Likewise, last year legislators in Massachusetts, Minnesota and New Hampshire put forth - and passed - proposals to increase their state's cigarette tax. Such proposals to increase cigarette or tobacco taxes are a politically expedient way to add to state or federal coffers while ostensibly reducing consumption. Since 2000, U.S. states have increased state cigarette tax rates more than 100 times and, generally, smoking prevalence in the U.S. has continued to decline, but is this decline caused by the increase in taxes? If so, what would happen to tobacco consumption if tax rates on cigarettes are cut? An understandably instinctive answer is that consumption would rise, as the price of cigarettes would presumably fall with the tax cut. However, this instinctive answer assumes that smokers purchase all of their cigarettes through legal means where the sale is taxed. In reality, this is not necessarily the case. Taxes have been shown to increase the size of black markets and to cause economic activity to move underground as price-sensitive individuals look for creative ways to evade taxation. Studies have shown that in the tobacco industry, consumers willingness to switch from smoking legally purchased cigarettes and tobacco to contraband products increases with tax hikes. Econometric analysis conducted by Jean-Francois Ouellet, Associate Professor of Marketing at HEC Montreal, and his co-authors Mariachiara Restuccia, Alexandre Tellier and Caroline Lacroix, found that each additional dollar in final applicable taxes raises the propensity to resort to consuming contraband cigarettes by 5.1 percent. This is consistent with the literature pertaining to counterfeit products - that for a product yielding the same benefit, consumers will typically consider a lower-priced option despite the fact that it is illegal. And where there is consumer demand for cheaper products, despite legality, there is profit incentive for players to provide those products on the black market. High cigarette taxes lead to inflated prices, which allow smugglers to profit from bringing cigarettes out of lower-taxed areas and re-selling them into higher-taxed jurisdictions. For instance, in the United States, cigarette prices differ from state to state depending on the states' cigarette tax regimes. Therefore, cigarettes sold in states with low tax rates can be bought and re-sold on the black market in states with high tax rates, yielding a profit for the seller. High taxes also increase the incentive for producing illegal cigarettes completely outside the tax regime. In this case, cigarettes are produced in illegal, unregulated factories and sold on the black market. The sum effect of these factors suggests that it is possible that rather than reducing cigarette consumption, high taxes might shift some consumption from the legal to the black market - that is, to smuggled and/or illegally produced cigarettes. The corollary of this is that tax cuts could drive out illicit trade without increasing overall cigarette consumption. Due to its dramatically varied cigarette taxation rates over the past two decades, Canada has witnessed first-hand the effects that taxes can have on illegal tobacco sales. It therefore provides an excellent case study of the effects of both increasing and decreasing such taxes. This policy brief begins with some background on tobacco taxes in Canadian history. It then analyzes how various changes in the law, both tax increases and cuts, have affected illicit trade, informing policy-makers on likely effects of taxation. Details: Los Angeles: Reason Foundation, 2014. 12p. Source: Internet Resource: Policy Brief 113: Accessed April 7, 2015 at: http://reason.org/files/cigarette_tax_illicit_trade.pdf Year: 2014 Country: Canada URL: http://reason.org/files/cigarette_tax_illicit_trade.pdf Shelf Number: 135178 Keywords: Black MarketCigarette SmugglingCigarette TaxesCigarettes (Canada)ContrabandIllegal ProductsTobacco |
Author: Tobacco Institute of India Title: The Threat of Growing Illegal Cigarette Trade in India: Adversely Impacting Legal Industry, Government Revenue and Livelihood Summary: Illegal Cigarette trade comprising international smuggled and locally manufactured tax-evaded cigarettes accounts for as much as 1/5th of the Cigarette Industry in India. Extremely high tax rates and constantly increasing tax rates on Cigarettes provide a profitable opportunity for tax evasion by illegal trade in both international smuggled and domestic tax evaded cigarettes Details: New Delhi: Tobacco Institute of India, 2015. 20p. Source: Internet Resource: Accessed February 10, 2017 at: http://www.tiionline.org/bookpublications/threat-of-growing-illegal-cigarette-trade-in-india-july-2015/ Year: 2015 Country: India URL: http://www.tiionline.org/bookpublications/threat-of-growing-illegal-cigarette-trade-in-india-july-2015/ Shelf Number: 146002 Keywords: Cigarette TaxesIllegal Cigarette TradeIllegal CigarettesIllegal Tobacco TradeIllegal TradeSmugglingTobacco Industry |