Ottawa, February 2, 2007

Archived - Tobacco Manufacturers' Surtax Relief Proposed for Tobacco Processors

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The Honourable Jim Flaherty, Minister of Finance, today tabled in the House of Commons draft legislation to relieve processors of leaf tobacco that are not related to any tobacco manufacturers from paying the Tobacco Manufacturers' Surtax.

The proposed measure will apply to the 2007 and subsequent taxation years.

"Taxation of tobacco products remains a key element of government efforts to control consumption, particularly among our youth," said Minister Flaherty. "However, given that leaf tobacco processors do not manufacture consumable tobacco products, they should not be subject to the manufacturers' surtax."

Leaf tobacco processors generally carry out the activities of sorting, grading, drying and packing leaf tobacco grown in the tobacco-growing regions of Canada.

Interested parties should send their comments on the draft legislation by February 16, 2007, to:

Tax Legislation Division
Tax Policy Branch
Department of Finance
L'Esplanade Laurier, 140 O'Connor Street
Ottawa, Ontario
K1A 0G5

For further information, media may contact:

Chisolm Pothier
Press Secretary
Office of the Minister of Finance
David Gamble
Media Relations
Department of Finance

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