Tobacco Tax and Minimum Excise Tax Rise in the 2016 Budget
Date: Mar 2016
In the most recent Budget, delivered by Chancellor of the Exchequer George Osborne on 16 March 2016, it was announced that tobacco tax is to rise. As previously announced, there will be an increase of 2% above inflation to manufactured cigarettes. Meanwhile, there will be an increase of 5% above inflation on hand-rolled tobacco.
ASH – Action on Smoking and Health, a campaigning public health charity focussed on the harm caused by tobacco – has come out in support of these increases. In particular, they have praised the additional 3% rise in tax on hand-rolled tobacco, which they say will help to close the price gap between manufactured and hand-rolled cigarettes – which is, they say, of pressing importance given the number of people switching over to hand-rolled cigarettes. The policy to narrow that price gap has been identified as one of the key recommendations of both ASH and the UK Centre for Tobacco and Alcohol Studies.
The Chancellor also committed to the introduction of a minimum excise tax, which will help to establish an ‘effective floor’ on the price of cigarettes, and hopefully discourage smokers from switching to cheaper cigarette brands instead of quitting smoking altogether.
Source: ASH press release dated 16.03.2016
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Last revised: 23 March 2016
Next review: 23 March 2019