The (Scottish - by the sound of his accent - Morningside ) Chancellor (AKA The Smuggler's Friend) hit the law of Diminishing Returns with a bang yesterday.
14 p on a bottle of jolly old Vin/Vino will raise £300 Mn in extra Tax Revenues
4 p on pint of beer and 3p on cider will raise £100Mn.
55p on a bottle of Scots falling down juice (now nearly 75% of label price) - tax revenues remain unchanged at £2.3 Bn.
£400 million gain , that will be pissed away on carousel fraud in a month (see previous posts ad fucking nauseam). Or put another way will buy you 0.01% of Northern Rock costs to the taxpayer todate (see previous posts ad fucking nauseam).
Out of Interest Hansard 18th May 1999 Col 366
Ms Lawrence: To ask the Chancellor of the Exchequer what is his latest estimate of the revenue lost to the Exchequer through smuggling of tobacco. 
Dawn Primarolo: In his Budget speech of 9 March, the Chancellor explained that in terms of the turnover of criminals' tobacco smuggling is now a £1½ billion business. That was an assessment by HM Customs and Excise based on their work in progress to monitor the scale of such smuggling (chiefly of cigarettes and hand-rolling tobacco). The provisional results of this work indicate that the total amount of revenue (excise duty and VAT) evaded in 1998 was perhaps around £1.7 billion.
Forms of tobacco duty evasion covered by this assessment include cross-Channel smuggling of cigarettes and hand-rolling tobacco, smuggling by air passengers, diversion frauds and smuggling over very large consignments in freight.
HM Customs and Excise will continue to examine ways of measuring such smuggling, and are discussing with representatives of the tobacco industry ways of improving the methodologies used.
" Customs lost about £2.9bn in excise duty in 2003-2004 and the figure is expected to increase in 2004-2005." BBC
"The government is losing £3.75bn a year in excise duty because of tobacco and alcohol smuggling, an all-party committee of MPs reports today.
Despite a government campaign to crack down on fraud, the Treasury select committee said 10% of excise duty receipts were going unpaid, equivalent to the revenue from 1p in income tax." Guradian March 2005
"Commenting on the Chancellor's decision to increase tobacco taxes in today's Budget, (11p on a pack of 20) Christopher Ogden, Chief Executive of the Tobacco Manufacturers' Association (TMA), said: "The increase in tobacco tax announced today will do little to reduce the level of tobacco smuggling and crossborder shopping which lost the Treasury GBP4.5 billion in revenue last year. The decision helps to maintain the UK's position as one of the world's most profitable destinations for tobacco smugglers and this is of great concern to the TMA and its member companies."
"The TMA estimates that in 2007 around GBP4.5 billion in revenue was lost through smuggling and crossborder shopping in tobacco products and over the last ten years these losses exceed GBP40 billion. "PR Newswire yesterday