B.C.’s rising tobacco tax will hurt Greater Victoria cigar stores, says a retailer.
The government announced a tax hike on cigarettes and cigars in Tuesday’s budget.
As of April 1, the maximum tax on cigars will increase to $7 per cigar.
“It’s a big hit for us because basically every single product in our store is going to go up overnight without us making any more money,” said Phil Turcotte, manager of Goodfellas Cigar Shop in Victoria.
“It just goes into government coffers and disappears into the system.”
Around half of the cigars for sale at Goodfellas are subject to the maximum provincial tax, he said.
The change will increase the provincial tax rate on cigars to 90.5 per cent of the sale price, to a maximum of $7. The current rate is 77.0 per cent, with a maximum of $6.
When federal taxes, export taxes and fees are taken into consideration, cigars are subject to between 500 and 1,000 per cent tax, Turcotte said.
“I don’t think most people realize how extreme it is,” he said. “Most of the cost of tobacco is just the tax.”
The tobacco tax increase will also add $2 to a carton of cigarettes. B.C. Finance Minister Mike de Jong said he hopes the tax increases would encourage people to quit smoking.
© Copyright 2013