Apr 03 2012
The Henry Tax review recommended that the duty-free sales of tobacco should be abolished.
Australia is one of 174 signatories to the World Health Organization Framework on Tobacco Control, also obliges countries to ban or limit the duty-free sales of tobacco. If the incoming tourists and locals can not buy a cheap tobacco at airports, they will buy it in stores, tax free. Review of Henry’s estimated $ 200 million loss of tax on tobacco products will come into the treasury as a result.
The tobacco industry argues that the incoming travelers just buy them duty-free shipments to foreign airports and bring them here, but it’s easy to oppose removing not only the duty-free sales of tobacco, but the duty-free import allowances.
I was in Singapore last week at the 15th World Conference on Tobacco and Health, and the Canadian speaker told how he had to pay $ 120 to deposit into the sample package from around the world to display in his oral presentation. Singapore, along with Barbados and Sri Lanka, Nepal and Romania tax all incoming tobacco, even one package. Hon Kong allows arriving passengers bring only 19 cigarettes tax free. The European Union removed duty free concessions to remove its citizens traveling to Europe in 1999. Another 11 countries to establish tax-free allowance of less than 80 cigarettes (four packs), and Australia is one of the world’s most generous, allowing each passenger to 250 cigarettes.
Duty-free tobacco concession was established long before the government realizes that the tobacco tax was one of the surest ways to achieve the twin goals of reducing tobacco consumption and raise revenue. Many of them are cynical that the excise tax on tobacco products is simple and easy – only 15 percent of voters who are currently smoking – a popular way to raise revenue. But the internal documents of tobacco companies are often frank about the role of taxes in reducing consumption. For example, two of Philip Morris notes state, “the high price of cigarettes is greater than any other cigarette attribute, has the greatest impact on the output share of the population” and “the most certain way to reduce consumption through price.”
Continued duty free travel perk is completely incoherent with government policy on tobacco control. It encourages smokers to buy, including the lungs of smokers who want to buy more than they are normally at low prices. It also links with the tobacco thrill of international travel and vacations and luxury items like watches, good spirits and wine by the end, electronic goods and perfumes.
Objections can be expected that the termination of duty-free tobacco may act to prevent the Asian male tourists from countries with high levels of smoking (China, Japan, and Korea). These empty threats were made in respect of each country, the ban on smoking in restaurants and bars, but no good. This is a rare airline that allows smoking today and stereotypes about places such as China have no restrictions on smoking on: all forms of public transport, many offices and a growing number of restaurants in China smoke free today.
Of course, the argument about the loss of income relates to the duty-free concessions for the sale of all goods that can be found in the duty free shops. But neither the government, it seems, can play Scrooge in the near future on that. But the removal of tobacco duty free sales and imports will be popular, improving health, increasing incomes and ensuring policy coherence. As Wayne Swan prepares the budget this year, it is historically archaic anomaly should be simple and reasonable goal. The only people who will scream the big tobacco companies and duty free, including the Nuance Group, chaired by Nick Greiner, former chairman of British American Tobacco.