THE cost of a packet of cigarettes could top £16 at next week’s Budget.
The Treasury is eyeing a dramatic increase in tobacco duty to ensure a tax on vapes keeps smoking alternatives cheaper.
GettyThe price of a pack of cigs could hit a whopping £16 as Jeremy Hunt is set to whack new taxes on fags at next week’s budget[/caption]
Last year Jeremy Hunt added £1.55 to a pack of 20 cigarettes – with a similar hike being considered for March 6.
The average cost of a 20-pack of cigarettes is currently £14.39 – making Britain one of the most expensive places to smoke in Europe.
In France cigs cost about £9 per compared to £7 in the Netherlands and £6.50 in Germany.
The move comes as part of Rishi Sunak’s tough stance on smoking – with the PM known to personally be extremely anti-tobacco.
READ MORE MONEY NEWS
At party conference last year he unveiled plans to outlaw smoking for anyone born after 2009 by raising the legal age of buying fags by one year ever year.
And disposable vapes will be banned as part of a clampdown announced earlier this year.
Next month’s Budget is set to see new vape tax imposed on imported e-cigs and manufacturers in an effort to make them unaffordable for kids.
The duty will apply to the liquid in vapes, with higher levels for products with more nicotine.
Sources say the extra tax hike on fags is designed ensure that vapes are still the cheaper option for smokers.
The vape tax is being modelled on European schemes, such as Germany which imposed a €1.60 duty on every 10ml of vape liquid.
The two new levies will like bring in half a billion pounds to the struggling Treasury coffers.
But tobacco firms have today warned the soaring price of fags is driving illegal black market sales.
Sarah Connor of JTI UK said: “Unreasonable tobacco taxes fuel criminal sales of illegal tobacco, cost taxpayers’ money and drive-up inflation.”
JTI research suggests that a quarter of cigarettes and 38 per cent of rolling tobacco sold in the UK swerves tax.
Christopher Snowdon, Head of Lifestyle Economics at the free market think tank, the Institute of Economic Affairs, said: “The government’s approach to vaping has become an incoherent mess.
“It says it wants to clamp down on disposable vapes and yet it is going to tax refillable e-cigarette liquid. It is giving away e-cigarettes for free with its Swap to Stop scheme while making vaping less affordable for those who are prepared to pay.
“It says it wants to lower the tax burden but seems happy to tax smoking cessation.”
HMRC estimates £9.3 billion in tax revenue has been lost due to illegal tobacco sales.