Reeves should also legislate to introduce a recurring annual levy on the profits tobacco firms make, they say, which in the case of Imperial Tobacco is a £66.50 margin on every £100 of sales.
A recent set of accounts from Imperial Brands, which owns Imperial Tobacco. Now, the question is, can you see a 66% net profit in there? Can you see 66% of anything that could in fact be taxed away?
The company's post-tax profits were £2.3 billion from £32.5 billion of revenue. Not too shabby (regulation has turned the industry into an oligopoly, after all), but hardly extraordinary.
Who is really profiteering from tobacco? Step forward, the government. While Imperial gets less than £2.5 billion for making the product, governments around the world are creaming off more than £15 billion.
Where does the 66% claim come from? It comes from this study published in 2015. The estimates are based on the "author’s calculation" but since the author is the economically illiterate prohibitionist clown Anna Gilmore, they are very wrong.
Her estimates are based on UK sales whereas the figures above are global but that makes no difference to the overall picture. Indeed, tobacco duty is well above average in the UK so the government's share is even higher.
Meanwhile, the government expects to make £3.6 billion from gambling duty this year, but that isn't enough for Derek Webb's mates at the Social Market Foundation who have just released a report calling for Remote Gaming Duty to be doubled from 21% to 42% - because arbitrary and capricious tax hikes on one of Britain's few world-leading British industries are just what we need to attract inward investment.
Incidentally, some activist-academics have their concerns about a tax raid on gambling companies...
https://t.co/IyuOGONi0m
— Heather Wardle (@shwardle) October 12, 2024
If this happens, would increased funding for treatment, prevention etc come from these generalised funds or would the levy still be on the table?
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