Province Backs Measures to Stop Smuggling

Service Nova Scotia and Municipal Relations (to March 31, 2014)

April 11, 2001 4:08 PM


The province’s new tobacco fines are stiff enough to help butt
out tobacco smuggling, according to Angus MacIsaac, Minister of
Service Nova Scotia and Municipal Relations. His department
houses the Provincial Tax Commission.

The new fine structure, proposed under amendments to the
Financial Measures Act last week, is in response to a 1998
Provincial Court ruling that struck down penalties outlined in
the current legislation as a violation of the Charter of Rights
and Freedoms. This decision had the effect of leaving no
legislated fine structure in place. Fines for tobacco smuggling
continue to be imposed by the courts, but are not based on any
legislated criteria and have resulted in great inconsistency
across the province.

"There are three components to the new structure -- fines for
smuggling, penalties for tax evasion and imprisonment on
defaulted payments," said Mr. MacIsaac. "Make no mistake, we are
targeting those who deal in the illegal tobacco trade with hefty,
enforceable penalties."

The new fines follow a graduated structure that increases with
the quantity of tobacco smuggled and whether it is a first or
subsequent conviction.

In addition to court fines, anyone caught with illegal tobacco
must pay a tax evasion penalty, which is equal to three times
what the taxes would have been had the tobacco been sold to
taxable consumers. For example, the tax on 50 cartons of
cigarettes is $677, making the penalty $2,031 on top of the
court-imposed fine. This fine is in addition to federally imposed
fines.

A first conviction for smuggling 50 cartons of cigarettes or less
carries a fine of $500 to $2,500 plus the tax evasion penalty.
Defaulted payments results in up to 90 days'' imprisonment.

A first conviction involving 50 cartons of cigarettes or more
carries a fine of $2,500 to $25,000 plus the tax evasion penalty.
Defaulted payments carry up to 180 days'' imprisonment.

Subsequent convictions, regardless of amount, carry fines between
$5,000 and $50,000, plus the tax evasion penalty. Defaulted
payments result in a prison term of up to one year.

Fines under the old structure ranged from $10,000 to $50,000 plus
an amount equal to the tax on the quantities involved.


FOR BROADCAST USE:

     The province says its new penalties will be more effective

in butting out tobacco smuggling.

     The new penalties have been put in place because of a 1998

court ruling that struck down the penalties in the current

legislation.

     This decision left no legislated fine structure in place.

The courts continue to fine convicted people for smuggling

tobacco. However, there is great inconsistency across the

province.

     The new penalties include court fines, a tax evasion penalty

and prison terms on defaulted payments. The tax evasion penalty

is equal to three times the taxes on the quantity of illegal

tobacco.

     The new fines follow a graduated structure that increases

with the quantity of tobacco smuggled and whether it is a first

or subsequent conviction.


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Contact: Robyn McIsaac
         Service Nova Scotia and Municipal Relations
         902-424-6336
         E-mail: mcisaarc@gov.ns.ca

kjd         April 11, 2001      4:05 P.M.