Loss Of Government Revenue From Tobacco Taxes

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1) Loss of government revenue
Another problem caused by these policies is the loss of government revenue from tobacco taxes. According to a September 2013 report by the International Tax and Investment Center and Oxford Economics (ITIC-OE), In 2011, the Legal Domestic Sales of cigarettes fell by 80.6%, from 308 million cigarettes in 2010, to just 60 million cigarettes a year after the tax increase. Total Consumption (legal and illicit) is estimated at 317.9 million cigarettes in 2013, down 9.5% from 2012. However, only 2.4% or 7.7 million cigarettes constitute Legal Cigarettes Consumption. In 2013, excise tax loss as a percentage of potential total excise tax revenues is estimated to be 99.6% (US$ 62 million) a rise from 93.4% in 2012, the highest amongst the 14 Asia countries surveyed. Actual revenues from excise duties fell from US$ 21,627906 in 2010 to US$ 233,000 in 2013.
However, the Thailand-based Southeast Asia Tobacco market control Alliance (SEATCA) in a report released in June 2014 said figures from the 2013 report of the International Tax and Investments Centre and Oxford Economics (ITIC/OE) in September 2013 “grossly overestimated” its numbers and was based on flawed research methodologies. SEATCA had also pointed out that the ITIC-OE report was funded by Phillip Morris International. Regardless of the numbers, there is consensus that there is a causation effect of the drastic tax hike which prompts Brunei’s legal cigarette sales to plummet to almost none,
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