XN000022-1987-02-25 — Page 34

WEDNESDAY, FEBRUARY 25, 1987

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ASSUMING NO CONSUMER RESISTANCE, THESE CHANGES IN RATES WERE ESTIMATED TO RAISE AN ADDITIONAL REVENUE OF $50 MILLION.

TURNING TO IMPORTED TOBACCO, MR JACOBS PROPOSED TO INCREASE THE DUTY ON IMPORTED UNMANUFACTURED TOBACCO FROM $190 TO $200 A KILOGRAM, AND THAT ON IMPORTED CIGARETTES FROM $210 TO $220 A KILOGRAM, RAISING AN ADDITIONAL REVENUE ESTIMATED AT $47 MILLION IN 1987–88.

+ON THE BASIS PROPOSED, THE DUTY DIFFERENTIAL BETWEEN IMPORTED UNMANUFACTURED TOBACCO AND IMPORTED CIGARETTES WILL REMAIN AT ABOUT 10 PER CENT,* HE SAID.

DUTY RATE ON CIGARS WAS ALSO PROPOSED TO INCREASE FROM $210 TO $220 À KILOGRAM, AND THAT ON MANUFACTURED TOBACCO (OTHER VARIETIES) FROM $190 TO $220 A KILOGRAM, KEEPING THEM IN LINE WITH THOSE ON IMPORTED MANUFACTURED CIGARETTES AND IMPORTED UNMANUFACTURED TOBACCO.

ON CHINESE PREPARED TOBACCO, MR JACOBS PROPOSED TO INCREASE BUTY RATE FROM $40 TO $43 A KILOGRAM, IN LINE WITH INFLATION SINCE 1985 WHEN IT WAS LAST REVISED.

ADDITIONAL REVENUE YIELDED FROM THESE TWO PROPOSALS WOULD BE $8 MILLION,

QUOTING HIS PREDECESSOR, SIR JOHN BREMRIDGE, AS MENTIONING IN 1985 THE OPTION OF IMPOSING AN AD VALOREM DUTY ON TOBACCO MR JACOBS SAID THE TRADE WAS SUBSEQUENTLY CONSULTED AND THEIR RESPONSE WAS FAR FROM UNANIMOUS.

HE ADMITTED THAT THE EXISTING DUTY STRUCTURE ON TOBACCO WAS LESS THAN IDEAL+.

+IT IS MY PRESENT INTENTION TO MOVE IN DUE COURSE TO A SIMPLER DUTY STRUCTURE IN WHICH DUTIES WOULD BE LEVIED ON NUMBERS OF CIGARETTES RATHER THAN ON WEIGHT OF TOBACCO, HE SAID.

EXPLAINING THE PRINCIPLE UNDERLYING HIS PROPOSALS REGARDING DUTIABLE COMMODITIES, MR JACOBS SAID DUTY RATES SHOULD BE MAINTAINED IN REAL TERMS+.

+MY OBJECTIVE IS TO SECURE REGULAR SMALL CHANGES BROADLY IN LINE WITH INFLATION RATHER THAN LESS FREQUENT, BUT INEVITABLY LARGER, INCREASES.

+THERE ARE SOME MINOR EXCEPTIONS TO THIS PRINCIPLE BUT, BY AND LARGE, I HAVE FOLLOWED IT CLOSELY, HE SAID.

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