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More Islanders will keep turning to untaxed duty free cigarettes if the States continue with inflation-busting duty rises, new research shows.
More Islanders will keep turning to untaxed duty free cigarettes if the States continue with inflation-busting duty rises, new research shows.
A survey carried out in Jersey, on behalf of tobacco importers and manufacturers, has shown that half of all smokers are buying more duty free than they were a year ago, and that just over two-fifths (41%) of all cigarettes smoked in Jersey come from duty free sales.
With around 60% of the cost of cigarettes now coming as tax, the regular increases in duty and the fact that many are being driven to break the law by bringing in more than the legal allowance have led to a boom in tax-free sales. The States are potentially losing out on more than £9m in revenue through duty free, compared to £6.8m as recently as 2010, with struggling local retailers also missing out on trade.
The survey revealed:
James Filleul, spokesman for the Channel Islands Tobacco Importers and Manufacturers Association (CITIMA) said:
‘Local businesses are seeing their trade increasingly move to duty free outlets, and that means a big loss to the Island’s Treasury. Large duty increases at budget time only make that situation worse, and give yet further encouragement to travellers to break the law and exceed their duty free allowance, and the Customs department just isn’t resourced to tackle that.
‘This research should introduce some realism to the issue. Given the frequency with which Islanders travel, there are so many opportunities either to buy duty free yourself, or ask someone to buy it for you. That means big duty increases just increase the temptation to exceed legal allowances, meaning less business for shops, and less money for the Treasury. We hope the Treasury Minister will show restraint in the forthcoming budget.’
