News Release Archive

FINANCE--TOBACCO TAX CHANGES DETAILS RELEASED
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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
follows:

                          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


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Contact: Bruce Cameron  902-424-8787

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