Background and Context:
Higher tobacco taxes and prices are a well-established means of reducing tobacco use. However, government decisions to allow duty-free tobacco sales and import allowances undermine the benefits of a high tobacco tax strategy.
A growing number of national governments are curbing duty-free tobacco, consistent with Article 6.2 of the WHO Framework Convention on Tobacco Control (FCTC).
This presentation will make the he case for banning duty-free tobacco sales and for banning/restricting duty-free personal import allowances
Duty-free tobacco sales:
Result in less expensive tobacco
Increase social acceptability of tobacco
Associate tobacco with international travel, and with a luxurious lifestyle
Provide a tax break available only to those who travel internationally
Provide an unfair privilege to some retailers to the detriment of other retailers
Reduce government revenue
Contribute (in some parts of the world) to illicit trade
Two countries have banned duty-free sales to departing travellers -- Nepal and Romania. In 1999, the European Union banned duty-free sales to individuals travelling within the EU. In Canada, the federal tobacco tax applies to sales in "duty free" stores.
Although a duty-free import allowance for travelers of 200 cigarettes is common in many countries, more countries are reducing the allowance, including recent changes in Australia and New Zealand. Here are the rankings for the lowest duty-free import allowances for cigarettes:
0 Sri Lanka
19 Hong Kong
40 various EU countries (mainly at land borders)
50 New Zealand
Proposed bans on duty-free tobacco sales have been strongly opposed by the tobacco industry – the industry’s “scream test” has been passed.
Outcomes/What was learned:
Intentionally reducing tobacco taxes/prices undermines public health and public revenue. Governments should ban duty-free tobacco sales to travellers (including on airplanes and ships), and should eliminate/restrict duty-free import allowances.