Growing illicit tobacco market shows failure of high taxes

April 18, 2013 5:31 PM

New research by consultants KPMG for tobacco company Philip Morris International has claimed that the UK has the EU's fastest growing black market, which now accounts for one in six cigarettes sold.

These figures follow research published last year by the TaxPayers' Alliance which revealed that the tax loss from illicit alcohol, tobacco and fuel totalled £28.5 billion.

It's increasingly clear that the UK's high lifestyle taxes have become ineffective at both raising revenue and controlling consumption. Governments can only go so far in hiking taxes before people start to ignore them and enter the black market instead.

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