Before asking your this question, I’d like to show you in Alberta how the price of cigarette are composed of.
Carton of 200 cigarettes
The manufacturers' price (as of October, 1997) is $9.69.
The federal excise duty is $5.50.
The federal excise tax is $5.36.
The provincial tobacco tax is $14.00.
The wholesale/retail margin is about 11%, or $3.80.
There is no provincial sales tax.
The federal G.S.T. adds 7%, or $2.68.
The total price is therefore $41.02.
It is very clear that manufactory cost is almost not changed, and wholesale or retail margin will also be kept in a certain level. That means increase tax on cigarette will cause smoker have to pay extremely high tax.
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