News Release Archive

Finance Minister Bill Gillis has released details of tobacco tax
changes to ensure the price to consumers does not change as a
result of sales tax harmonization on April 1, 1997.

As of that date, the Harmonized Sales Tax (HST) will be added at
the retail level at a rate of 15 per cent. Right now, the only
retail tax is the Goods and Services Tax (GST) at 7 per cent. To
maintain current prices for consumers, that means a reduction in
tobacco taxes imposed at the wholesale level.

The Department of Business and Consumer Services has informed
tobacco wholesalers that the tobacco tax changes will be as

                          Old Tax Rate  New Tax Rate  Reduction   
per cigarette            5.29›         4.22›         1.07›

per package of 20        $1.06         $0.84         $0.22
per package of 25        $1.32         $1.06         $0.26
per carton of 200's      $10.58        $8.44         $2.14

Similar changes have been put into effect for other tobacco
products. Dr. Gillis said, "When the HST is added to these new
taxes, the result should be neither a price increase or a
decrease for consumers."

"There will be no change in price. If you are paying $4.00 for a
package of cigarettes today, you will pay $4.00 for them next
week," Dr. Gillis said.

There will be a refund of the tobacco tax paid on inventory held
by wholesalers as of the close of business on March 31, 1997. A
detailed record of the inventory count is required.

Businesses that require more information may contact:

Provincial Tax Commission
Tax Information Group
1505 Barrington Street, 9th Floor
Halifax, Nova Scotia
B3K 3K5
or call 902-424-6300 or toll free 1-800-565-2336


Contact: Bruce Cameron  902-424-8787

trp                     Mar. 27, 1997 - 4 p.m.