EDN35 Changes to Excise Duty Rates on Tobacco Products
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EDN35 Changes to Excise Duty Rates on Tobacco Products
February 2014
The information in this notice is for reference purposes only and does not replace the Excise Act, 2001 (the Act) or its regulations. Should there be any discrepancy between the information in this notice and that contained in the Act or its regulations, the legislative provisions apply. As the information in this publication may not completely address your particular situation, you may wish to refer to the Act or appropriate regulation, or contact any Canada Revenue Agency regional excise duty office for additional information. These offices are listed in Excise Duty Memorandum EDM1.1.2, Regional Excise Duty Offices.
On February 11, 2014, the Minister of Finance tabled a Notice of Ways and Means Motion, which proposes amendments to the Excise Act, 2001 to increase the rates of excise duty on tobacco products. These rates will take effect February 12, 2014.
The new rates are outlined in the following tables. For further information, please contact your regional excise duty office.
Schedule 1, sections 42 and 43.1, Excise Act, 2001
Rates of duty on tobacco products
| Cigarettes | Previous rate | New rate |
|---|---|---|
| Cigarettes (Canadian or imported) for the regular domestic market – for each five cigarettes or fraction of five cigarettes contained in any package | $0.425 | $0.52575 |
| Black stock cigarettes manufactured in Canada for delivery by the manufacturer (licensee) to foreign or Canadian duty free shops, to customs bonded warehouses, or for use as ships' stores in accordance with the Ships' Stores Regulations – for each five cigarettes or fraction of five cigarettes contained in any package | $0.374875 | $0.52575 |
| Tobacco sticks | Previous rate | New rate |
|---|---|---|
| Tobacco Sticks (Canadian or imported) for the regular domestic market – per stick | $0.085 | $0.10515 |
| Black stock tobacco sticks manufactured in Canada for delivery by the manufacturer (licensee) to foreign or Canadian duty free shops, to customs bonded warehouses, or for use as ships' stores in accordance with the Ships' Stores Regulations – per stick | $0.074975 | $0.10515 |
| Manufactured tobacco other than cigarettes and tobacco sticks | Previous rate | New rate |
|---|---|---|
| Manufactured tobacco (Canadian or imported) for the regular domestic market – per 50 grams or fraction thereof | $5.3125 | $6.57188 |
| Black stock tobacco manufactured in Canada for delivery by the manufacturer (licensee) to foreign or Canadian duty free shops, to customs bonded warehouses, or for use as ships' stores in accordance with the Ships' Stores Regulations – per 50 grams or fraction thereof | $4.685938 | $6.57188 |
| Cigars | Previous rate | New rate |
|---|---|---|
| Per 1000 cigars | $18.50 | $22.88559 |
| Raw leaf tobacco | Previous rate | New rate |
|---|---|---|
| Per kilogram | $1.572 | $1.572 |
Schedule 2, sections 43 and 43.1, Excise Act, 2001
Additional duty on cigars
The previous rate was the greater of
- $0.067 per cigar, and
- 67%, computed on
- the sale price, in the case of cigars manufactured in Canada, or
- the duty paid value, in the case of imported cigars.
The new rate is the greater of
- $0.08226 per cigar, and
- 82%, computed on
- the sale price, in the case of cigars manufactured in Canada, or
- the duty paid value, in the case of imported cigars.
Schedule 3, sections 53, 54 and 56, Excise Act, 2001
Rates of special duties on certain manufactured tobacco
| Imported manufactured tobacco | Previous rate | New rate |
|---|---|---|
| Per cigarette | $0.075 | $0.10515 |
| Per tobacco stick | $0.075 | $0.10515 |
| Manufactured tobacco other than cigarettes or tobacco sticks – per 50 grams or fraction of 50 grams contained in any package | $4.6875 | $6.57188 |
| Traveller's tobacco | Previous rate | New rate |
|---|---|---|
| Per cigarette | $0.075 | $0.10515 |
| Per tobacco stick | $0.075 | $0.10515 |
| Manufactured tobacco other than cigarettes or tobacco sticks – per 50 grams or fraction of 50 grams contained in any package | $4.6875 | $6.57188 |
| Unstamped tobacco products | Previous rate | New rate |
|---|---|---|
| Per cigarette | $0.075 | $0.10515 |
| Per tobacco stick | $0.075 | $0.10515 |
| Tobacco products other than cigarettes or tobacco sticks – per kilogram | $93.75 | $131.4376 |
| Stamped tobacco products | Previous rate | New rate |
|---|---|---|
| Per cigarette | $0.095724 | $0.095724 |
| Per tobacco stick | $0.095724 | $0.095724 |
| Tobacco products other than cigarettes or tobacco sticks – per 50 grams or fraction of 50 grams | $5.98275 | $5.98275 |
As announced, excise duty rates will be indexed to the Consumer Price Index and automatically adjusted every five years. The first inflationary rate adjustment will be effective December 1, 2019.
Effective dates
The rates detailed above apply effective February 12, 2014. The CRA will collect the increased duty on a voluntary basis until such time as the amendments become law (i.e., Royal Assent). Importers and licensees that do not remit the duty in accordance with the new rates as of the date cited above will be required to pay interest on unpaid amounts once Royal Assent is received.
All technical publications related to the Excise Act, 2001 and its regulations are available on the CRA website at www.cra.gc.ca/exciseduty, under the title "Excise Act, 2001 – Technical Information".
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- Date modified:
- 2014-02-11