Tobacco Tax Rate Increases

This page explains the tobacco tax rate increase and future tobacco tax rate increases. It provides general information only and does not replace the Tobacco Tax Act and Regulations.

Tobacco tax increases are implemented by Ontario Regulation 5/05 made by the Minister of Finance under the Tobacco Tax Act.

Effective April 28, 2017

As announced by the Minister of Finance in the 2017 Ontario Budget, effective 12:01 a.m., April 28, 2017, the Ontario tax rate for cigarettes and other tobacco products (except cigars) is increasing from 15.475 cents to 16.475 cents per cigarette and per gram or part gram of other tobacco products. This means that the tobacco tax rate on a carton of 200 cigarettes is increasing by $2.00. The tax rate for cigars remains unchanged at 56.6 per cent of the taxable price.

The following is a summary of the previous rate and the new rate effective April 28, 2017:

  New Rate Previous Rate Increase
Per Cigarette $0.16475 $0.15475 $0.01
Other Tobacco Products (except cigars)

Per gram or part gram of tobacco product (e.g. coarse/fine cut, snuff, chewing tobacco)
$0.16475 $0.15475 $0.01

All tobacco wholesalers must collect and remit tobacco tax at the new rate on and after April 28, 2017.

Inventory requirements for non‑collector wholesalers

Wholesalers of tobacco products who are not collectors of tobacco tax are required to take an inventory of all cigarettes and other tobacco products (except cigars) held as of 12:01 a.m., April 28, 2017, and must remit the additional tobacco tax on that inventory, based on the difference between the previous and new tax rates, to the Minister of Finance by May 26, 2017.

As compensation, the wholesaler may deduct an amount of five per cent from the additional tax amount. However, wholesalers who deliver the inventory report or remit the additional tax after the due date will not be allowed to deduct five per cent from the additional tax amount.

The Ministry of Finance is emailing or faxing a Tobacco Products Inventory Report and instructions to wholesalers on April 28, 2017. For more information on the Tobacco Products Inventory Report and instructions please call 1‑866‑668‑8297 ext. 16042.

Wholesalers who have been designated by the Minister of Finance as Tobacco Tax Collectors are not subject to the inventory requirements.

Additional annual increases

In 2018 and 2019 tobacco taxes will be increased by an additional 2 cents per cigarette or gram of tobacco each year. This approach will replace the inflation-based tax increases announced in last year’s Budget.

The Ministry of Finance will notify wholesalers about inventory requirements and remittance of additional tobacco tax as related to the annual tobacco tax rate increases.

Request for written interpretations

For a written interpretation on a specific tobacco situation, please send your request in writing to:

Ministry of Finance
Advisory Services, Tobacco Tax
33 King Street West, 3rd Floor
Oshawa ON L1H 8H5

For more information

Visit ontario.ca/finance or contact the Ministry of Finance at 1‑866‑ONT‑TAXS (1‑866‑668-8297) or 1‑800‑263‑7776 for teletypewriter (TTY)

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