Loss Of Government Revenue From Tobacco Taxes - 791 Words

1) Loss of government revenue Another problem caused by these policies is the loss of government revenue from tobacco taxes. According to a September 2013 report by the International Tax and Investment Center and Oxford Economics (ITIC-OE), In 2011, the Legal Domestic Sales of cigarettes fell by 80.6%, from 308 million cigarettes in 2010, to just 60 million cigarettes a year after the tax increase. Total Consumption (legal and illicit) is estimated at 317.9 million cigarettes in 2013, down 9.5% from 2012. However, only 2.4% or 7.7 million cigarettes constitute Legal Cigarettes Consumption. In 2013, excise tax loss as a percentage of potential total excise tax revenues is estimated to be 99.6% (US$ 62 million) a rise from 93.4% in 2012, the highest amongst the 14 Asia countries surveyed. Actual revenues from excise duties fell from US$ 21,627906 in 2010 to US$ 233,000 in 2013. However, the Thailand-based Southeast Asia Tobacco market control Alliance (SEATCA) in a report released in June 2014 said figures from the 2013 report of the International Tax and Investments Centre and Oxford Economics (ITIC/OE) in September 2013 â€Å"grossly overestimated† its numbers and was based on flawed research methodologies. SEATCA had also pointed out that the ITIC-OE report was funded by Phillip Morris International. Regardless of the numbers, there is consensus that there is a causation effect of the drastic tax hike which prompts Brunei’s legal cigarette sales to plummet to almost none,Show MoreRelatedHow The Cigarette Industry Affects Society With Disease And Reduces Social Economic Welfare1142 Words   |  5 Pagesthought to far outweigh any economic benefits that the industry yields (Guhl Hughes n.d). To combat this, governments implement indirect taxes with the aim of reducing the number of smokers. 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