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Tobacco and fuel duties up eight per cent
The Financial Secretary, the Hon Sir Hamish Macleod, proposed today (Wednesday) in his Budget Speech in the Legislative Council to raise tobacco and fuel duties by eight per cent to keep pace with inflation.
Sir Hamish noted that revenue from tobacco duty decreased substantially in 1993-94 because of increased smuggling of cigarettes and decided last year to maintain duty rates at their existing levels so as not to aggravate the problem of smuggling.
"I also promised to step up our efforts to tackle the tobacco smugglers by setting up a 40-strong task force in the Customs and Excise Department," he said.
Since its establishment in April last year, the task force has proved extremely effective in tackling the problem.
Revenue from duty-paid cigarettes had increased by 28 per cent in the first nine months of this financial year.
Reports indicate that the black market price of cigarettes has also increased
markedly.
"This is a very welcome improvement.
We will continue to tackle the
smugglers through targeted investigations and intelligence gathering.
"Nevertheless, given the substantially improved situation, I consider that an inflation-related adjustment in the duty rate is now needed to preserve the deterrent effect of this tax," he said.
On fuel tax, Sir Hamish proposed to increase the duty on petrol and hydrocarbon oils by 8 per cent to keep pace with inflation.
The proposed increases in fuel duty and tobacco duty come into effect under a Public Revenue Protection Order issued today.
End/Wednesday, March 1, 1995