Swiss Tax Office To Decide On Tobacco Tax

by Ulrika Lomas, Tax-News.com, Brussels

14 February 2002

A coalition of nine anti-smoking groups has called on the Swiss Tax Office to abandon its 'cent-by-cent' approach to cigarette taxation and to impose massive tax increases on tobacco products in order to crush the nation's rising addiction.

The Tax Office was planning to introduce just a 10 cent increase in tobacco taxation this year, but the anti-smoking groups have called for an increase to SFr5.60 ($2.82) from the current standard pack price of SFr4.80, arguing that the current low levels of taxation on tobacco are in danger of creating a country-wide epidemic.

Richard Muller, Director of the Swiss Foundation for Alcohol and other Drug Problems revealed earlier this week that an alarmingly high proportion of Swiss citizens smoke - over 1 million out of a population of just 7 million. He also observed that although the costs of caring for those with smoking-related illnesses has risen to around SFr10 billion per year, currently, taxes on cigarettes raise just SFr1.8 billion.

However, the Swiss Cigarette Industry Association has condemned the proposal, claiming that in other countries, inccreased prices have done very little to deter smokers. It also warned that a tax hike could lead to an increase in the illegal importation of low-quality cigarettes.

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