Canadian tobacco taxes ... Has anyone done the math???
I am Canadian.
I was borned, raised and educated in Canada and I currently live in the Greater Toronto Area.
When I tell a foreigner that I am Canadian they generally associate that with two things ... Very cold weather and Very high taxes. Unfortunately both of these things are true. All in all, Canada is a great country but there is definitely room for improvement.
For starters, there is already a group of individuals working on the first issue ... cold weather. Here is the link and I gotta tell you that I love the idea ...
http://www.cfatp.ca/ms.html
I'm pretty sure that if this idea ever comes to fruition I will be one of the first people packing my bag for six months of the year.
I want work on the second issue, taxes, as it relates to the taxing of tobacco products.
I have a big issue with Tobacco taxes in Canada. The government justifies the taxes on tobacco by saying that smokers put financial strain on Canada's health care system therefore this extra tax subsidizes the health care system. First of all, I don't buy this argument for cigars and secondly I don't think you can group cigarettes and cigars into the same category. Let's do some math to illustrate my point. I consider myself a cigar smoker and if I had the time and the money I would smoke 1 cigar per day after dinner(currently I smoke 1-2 cigars per week). Most cigarette smokers I know smoke about 1 pack a day on average.
Here is how tobacco is taxed in Canada...
1) Provincial tobacco taxes
Effective January 19, 2005, the current rates of tax applied on tobacco products is as follows:
11.725¢ per cigarette/cigarette stick
$1.76 per pack of 15 cigarettes
$2.35 per pack of 20 cigarettes
$2.93 per pack of 25 cigarettes
$23.45 per carton of 200 cigarettes
11.725¢ per gram or part gram of cut tobacco
Tax on cigars is 56.6% of the taxable price*
* Taxable price of a cigar defined:
(i) taxable price = the price for which the cigar was purchased by its retail dealer + a prescribed percentage (currently 22%) of that amount; or
(ii) taxable price = the price paid for the cigar by the consumer where a consumer purchases the cigar directly from the manufacturer or importer of the cigar.
2) Federal excise duty
$0.07925 per cigarette
$0.065 per cigar plus 65% of the sale price plus $0.014786 per cigar
3) Federal GST of 7%
(Note: Some provinces even collect a provincial sales tax on tobacco, my example is based on Ontario which does not)
First let's calculate how much taxes a 1 pack/day (25) cigarette smoker pays per year...
$2.93 x 365 days = $1,069.45 (provincial tobacco tax)
$0.07925 * 25 * 365 = $723.16 (federal excise duty)
$8.28 * 7% * 365 = $211.55 (GST)
Now a 1 cigar/day, premium cigar smoker (Let's assume the retail dealer pays $8 for this premium cigar)
$8 + 22% = $9.76
$9.76 * 0.566 = $5.52
$5.52 *365 = $2,014.80 (provincial tobacco tax)
$9.76 * 65% = $6.34+$0.065+$0.014786 = $6.42 * 365 = $2343.30(federal excise duty)
$9.76 + $5.52 + $6.42 + 25%(retailer profit markup) * 7% = $1.90 * 365 = $693.04 (GST)
The result is a 1 pack/day cigarette smoker is paying $2.004.16 per year in taxes and a 1 cigar/day smoker is paying $5051.14 per year.
The total price after tax on a 25-pack of cigarettes $8.85 ... $5.48 is taxes
On an $8 premium cigar, the total price after tax is $29.02 ... $13.84 is taxes!
Someone that smokes 2 cigars a week is paying the same tax as someone that smokes 125 cigarettes a week ... This is totally ludicrous!!!
We (the Canadian cigar community) must seriously ban together to battle the government over this unfair treatment.
posted from http://cigarjournal.blogspot.com/
I am Canadian.
I was borned, raised and educated in Canada and I currently live in the Greater Toronto Area.
When I tell a foreigner that I am Canadian they generally associate that with two things ... Very cold weather and Very high taxes. Unfortunately both of these things are true. All in all, Canada is a great country but there is definitely room for improvement.
For starters, there is already a group of individuals working on the first issue ... cold weather. Here is the link and I gotta tell you that I love the idea ...
http://www.cfatp.ca/ms.html
I'm pretty sure that if this idea ever comes to fruition I will be one of the first people packing my bag for six months of the year.
I want work on the second issue, taxes, as it relates to the taxing of tobacco products.
I have a big issue with Tobacco taxes in Canada. The government justifies the taxes on tobacco by saying that smokers put financial strain on Canada's health care system therefore this extra tax subsidizes the health care system. First of all, I don't buy this argument for cigars and secondly I don't think you can group cigarettes and cigars into the same category. Let's do some math to illustrate my point. I consider myself a cigar smoker and if I had the time and the money I would smoke 1 cigar per day after dinner(currently I smoke 1-2 cigars per week). Most cigarette smokers I know smoke about 1 pack a day on average.
Here is how tobacco is taxed in Canada...
1) Provincial tobacco taxes
Effective January 19, 2005, the current rates of tax applied on tobacco products is as follows:
11.725¢ per cigarette/cigarette stick
$1.76 per pack of 15 cigarettes
$2.35 per pack of 20 cigarettes
$2.93 per pack of 25 cigarettes
$23.45 per carton of 200 cigarettes
11.725¢ per gram or part gram of cut tobacco
Tax on cigars is 56.6% of the taxable price*
* Taxable price of a cigar defined:
(i) taxable price = the price for which the cigar was purchased by its retail dealer + a prescribed percentage (currently 22%) of that amount; or
(ii) taxable price = the price paid for the cigar by the consumer where a consumer purchases the cigar directly from the manufacturer or importer of the cigar.
2) Federal excise duty
$0.07925 per cigarette
$0.065 per cigar plus 65% of the sale price plus $0.014786 per cigar
3) Federal GST of 7%
(Note: Some provinces even collect a provincial sales tax on tobacco, my example is based on Ontario which does not)
First let's calculate how much taxes a 1 pack/day (25) cigarette smoker pays per year...
$2.93 x 365 days = $1,069.45 (provincial tobacco tax)
$0.07925 * 25 * 365 = $723.16 (federal excise duty)
$8.28 * 7% * 365 = $211.55 (GST)
Now a 1 cigar/day, premium cigar smoker (Let's assume the retail dealer pays $8 for this premium cigar)
$8 + 22% = $9.76
$9.76 * 0.566 = $5.52
$5.52 *365 = $2,014.80 (provincial tobacco tax)
$9.76 * 65% = $6.34+$0.065+$0.014786 = $6.42 * 365 = $2343.30(federal excise duty)
$9.76 + $5.52 + $6.42 + 25%(retailer profit markup) * 7% = $1.90 * 365 = $693.04 (GST)
The result is a 1 pack/day cigarette smoker is paying $2.004.16 per year in taxes and a 1 cigar/day smoker is paying $5051.14 per year.
The total price after tax on a 25-pack of cigarettes $8.85 ... $5.48 is taxes
On an $8 premium cigar, the total price after tax is $29.02 ... $13.84 is taxes!
Someone that smokes 2 cigars a week is paying the same tax as someone that smokes 125 cigarettes a week ... This is totally ludicrous!!!
We (the Canadian cigar community) must seriously ban together to battle the government over this unfair treatment.
posted from http://cigarjournal.blogspot.com/
