The billion-dollar tax dodge on tobacco

Sunday, March 3, 2013

According to numbers acquired through a Canadian Taxpayer's Federation (CTF) Freedom of Information request to the federal government, Status Indians in Ontario purchased the equivalent of 70 cigarettes daily per person last year, along with 1,000 cigars annually. The fact that they don't smoke that much points towards a tax dodge by non-status buyers of between $742 million and $1.2 billion, just from contraband cigarettes in Ontario.

The CTF estimates that up to 79 per cent of all tax-free cigarettes intended for legal sale to Status Indians are illegally sold to those who are not, dodging $5.24 a pack in taxes.

Fred Neukamm, chair of the Ontario Flue-Cured Tobacco Growers Marketing Board, allows that the contraband cigarettes may have been grown outside of the system. This year's legal crop is likely to be up somewhat from slightly more than 50 million pounds in 2012 because of increased demand from China. BF