September 2005 Direction principale des enquêtes (Spécial Investigations)
Revenu Québec 2 PRESENTATION ON CANADIAN UPDATE PROVINCE OF QUÉBEC BIG SKY, MONTANA SEPTEMBER 12, 2005
Revenu Québec 3 CANADIAN STEERING COMMITTEE Composed of representatives from all provinces, territories and the federal governments They define the actions to be taken They meet twice a year Industry notified so that they can make presentations Assign projects to a Working Group
Revenu Québec 4 WORKING GROUP Completed a survey on ‘Tobacco Tax Exemption for First Nation Indians Current Projects Generic Returns Cigar definition Survey on Collectors and Wholesalers Licensing Requirements Update our priorities
Revenu Québec 5 MISSION Finding measures to fight against tobacco tax evasion is one of the primary missions of Revenue Quebec.
Revenu Québec 6 TAX RATES Cigarettes: 10.3cents/cig or $20.60/carton of 200 cigs Fine Cut: 10.3 cents/gram or $20.60/bag of 200 grams Cigars:80% of the retail selling price Others:*15.85 cents/gram *in respect to tobacco sticks and pre-rolled tobacco, the tax is the higher of either 10.3cents/stick or 15.85cents/gram
Revenu Québec 7 PRICES Cigarettes:about $58.00/carton + 7% GST – major brand Provincial Tax$20.60 Federal Tax$15.85 There are other brands that sell for about $46.00/carton. Less overhead Fine Cut:about $42.00/bag or can of 200 g + 7% GST Provincial Tax$20.60 Federal Tax$10.80 There are other brands that sell for about $22.00/bag with the required markings (not all products declared). On the black market, you can purchase a bag for about $12.00
Revenu Québec 8 MARKING REQUIREMENTS CIGARETTES PacksTear tape, white background, text color black, text Helvetica 8 bold, not less than 4.5 mm. Ex.:. CANADA. DUTY PAID – DROIT ACQUITTÉ – QUÉBEC CartonsStamp, at each end, white background, text color black, text Helvetica 10 bold, not less than 2.5 cm. Ex.: QUÉBEC CasesStamped or printed on at least two sides in black and a height of at least 38.1 mm. Ex.: QUÉBEC
Revenu Québec 9 MARKING REQUIREMENTS cont’d FINE CUT Bags or Cans Tear Tape same as pack of cigarettes. Stamp*on the stamp required by CRA, white background, text color black, text Helvetica 8 bold, not less than 4.5 mm. Ex TOBACCO – CANADA – TABAC QUÉBEC DROIT ACQUITTÉ –DUTY PAID Casessame as case of cigarettes. *in reality, it is done simultaneously, on the same stamp
Revenu Québec 10 MEASURES No tax increases Forming ACCES Committee Bill 70 Program for tobacco growers Other measures
Revenu Québec 11 NO TAX INCREASES Due to the increasing activity of non tax compliance, primarily with the growing manufactures on Reserves, the Minister of Finance has not increased the tobacco taxes for the last 2 years even if the rest of the Provinces have.
Revenu Québec 12 ‘ACCES’ COMMITTEE Established in 2001 Meets 3 to 4 times a year Members: Public Security, Finance, Revenue Quebec, Canada Revenue Agency, Quebec Provincial Police, Montreal Police, Municipal Police and Royal Canadian Mounted Police On ad hoc requests they meet with industry
Revenu Québec 13 ‘ACCES’ COMMITTEE cont’d They define the actions to be taken In 2004/05 plans were made to take measures against tobacco growers and manufacturers of fine cut tobacco Revenue Quebec inspects the retailers The Police investigates the criminal networks
Revenu Québec 14 BILL 70 In the Tobacco Tax Act we redefined ‘Carrier’s, Store's and Importer’s Permits’ to include raw leaf tobacco Oblige Carriers of raw leaf to have a manifest Oblige tobacco growers to hold proper books and records
Revenu Québec 15 TOBACCO GROWERS Incentives introduced by the Quebec Department of Agriculture to have the tobacco growers grow other crops 10 million dollar program Buy their machinery and quotas It will take up to 2 years to buy back all the equipment and dismantle all the dryers
Revenu Québec 16 TOBACCO GROWERS cont’d Introduced the obligation for a tobacco grower to register and obtain a ‘Grower’s Permit’ Obligation to file reports concerning their production and who they sold it to Went from 59 growers to 4 Revenue Quebec will inspect certain growers on their behalf
Revenu Québec 17 OTHER MEASURES We inspect approximately 2,400 retailers per year (14,000 retailers) Working with Federal Government on implementing a new ‘Marking Regime’ Leading a publicity campaign with, CRA and RCMP, intended for retailers, on the impacts of illegal commerce
Revenu Québec 18 OTHER MEASURES cont’d Meet with different associations Negotiating with different Indian Reservations Coordinate our activities with other organizations Increase the suspensions of permits and licenses
Revenu Québec 19 ANY QUESTIONS??? THANK YOU!!!