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Tobacco Tax Increase Hits France

NACS Daily News

The French government has raised the tax by 6.5%, the first bump in the country since 2004.

PARIS – French smokers are now paying more for their cigarettes and other tobacco products, including roll-your-own, as the country’s first tax hike in eight years went into effect Oct. 1, Radio France International reports. The nation’s tax rose 6.5% starting Oct. 1, which means a pack of cigarettes will cost an additional 40 cents.

“Our predecessors had planned on this increase but we’re instating it because an agreement has finally been reached between the state and tobacconists,” said Budget Minister Jérôme Cahuzac.

The tax hike will pour around 1 billion euros into French coffers. Last year, tobacco had an 80% tax rate, which brought in 13.8 billion for the government.

The tobacco tax increase will help fund some of the nation’s programs, but many industry experts have expressed concern that the French “tabacs” (tobacco shops) will suffer as French smokers cross the border in search of cheaper cigarettes. Italy and Luxembourg both sell cigarette packs for close to 2 euros less than in France. Currently, about 20% of the French purchase their tobacco in other countries.

But despite this, Cahuzac said the country would likely raise taxes on tobacco again in the future. “It is very possible that in the next five years, the price of tobacco will go up, as part of a national public health scheme,” he said.

France might also soon be under pressure to change how cigarettes are sold

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