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March 2, 1994

Canada Reduces Cigarette Tax to Fight Smuggling

JAMA. 1994;271(9):647. doi:10.1001/jama.1994.03510330015009

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WHILE A TAX increase on cigarette sales is being proposed in the United States, Canada is reducing federal taxes on cigarettes to combat smuggling.

Canada's reduction now is in effect, lowering federal tobacco taxes by $5 ($3.72 in US currency) to $11 on a 200-cigarette carton. The federal government also will match provincial tax reductions—so far announced by Quebec and New Brunswick—by as much as $10 (US $7.50) total on a carton.

Antismoking organizations in both the United States and Canada are expressing concern that the price reduction will encourage more Canadians to smoke and perhaps be used by the US tobacco industry to try to convince the American public not to support increased cigarette taxes. They say that had the Canadian government waited, the presidentially proposed 75-cent increase in cigarette taxes might have passed in the United States and probably made the smuggling of cigarettes into Canada less profitable.

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