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Home BUSINESSTax hike on tobacco will increase personal import: PTY
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Mon, 31 Mar, 2014 12:02:27 AM
FTimes-STT Report, March 31
Opened a pack of cigarettes. Photo – Lehtikuva.
The government decision to increase tax on tobacco might lead to an increase of private importation of tobacco products, said Kari Luoto, managing director of the Finnish Grocery Trade Association.
He made the assessment based on the lack of more accurate computation from the grocery stores.
Luoto pointed towards the previous initiative of increased taxation on alcohol that led to increased importation of wine.
He also gave an example of the availability of black market tobacco products from across the border in eastern Finland.
"These (products) do not bring income to the state, and no one can be sure what the products are," Luoto said, adding that there was no age control in the black market. 
The government has decided to raise tobacco taxation by 50 million euros during the recent budget talks.
According to trade association, the government earned 749 million euros from tobacco taxation in 2012. The association maintains that tobacco taxation in the country was on average higher compared to other EU states.
Smoked tobacks ouside a restaurant. Photo – Str / Lehtikuva.
The UK and Greece levy the highest taxation on tobacco in the EU.
The price level of tobacco products is also averagely on the higher side in the country compared to other EU states.
According to the government, 4.2 billion cigarettes were consumed in 2012. Of this number, 600 million cigarettes were consumed as a result of traveller importation, as revealed through interviews.
Two thirds of the private importation came from Estonia or from shops in ships.
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