Tobacco Tax

Bulletins

Legislation
Click on the link for a copy of Nunavut’s Tobacco Tax Act or Tobacco Tax Regulations.

Rates of Tax
Please refer to the Nunavut Tax Rate Sheet for this year’s tobacco tax rates.

Collection of Tax
Tax is applied on sales to consumers, but collected at the wholesale level and remitted monthly by collectors.

Monthly Reports
Collectors report and remit tax by the 20th of each month based on the previous month sales to retailers in Nunavut. Collectors may request authority to report in a manner that reflects their accounting system.

Inspection Program
Sales by wholesalers must be to retailers that hold valid retail dealers permits. Wholesalers must report the retail dealer permit number for each sale.

With assistance of the RCMP and on a random basis, site visits are performed on retail dealers for compliance with the Tobacco Tax Act.

Compliance Measures
Licensing
Tobacco wholesalers must enter into a Collector's Agreement and obtain a Wholesale Dealer Permit from the Minister.

Only these wholesalers may sell tobacco to retailers. Wholesalers may only sell tobacco to retailers which hold a valid Tobacco Retailer Permit. Only retailers with this vendor permit may sell tobacco to consumers. Valid retail vendor numbers are supplied to Wholesalers on request.

Security Requirements
The Minister may require collectors to deposit a bond by way of cash or other security.

Cancellation and Suspension
Grounds for canceling a permit include:

• Contravening the provisions of the Act or the terms of an agreement.
• Failure to remit tax, or to file a return.
• Failure to post the required security.
• Found guilty of an offense against the Act.
• Convicted for an offence under the Tobacco Act (Canada).

Before cancellations or suspension, persons are afforded the opportunity to show cause why the permit should not be canceled or suspended.

Audit
In making an assessment the Minister shall not consider a period or periods of time greater than six years prior to the date of commencement of the inspection, audit or examination of the books of account, records or documents unless there is evidence that the person has committed fraud where no limitation applies.

Penalties and Fines Penalties
The Minister may assess a penalty equal to 10% of the amount due against any person who fails to remit any tax collected when required.

Fines
Importing tobacco without a permit:

First offence:
For quantities less than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $200, and maximum $1,000 and/or imprisonment up to 30 days.

For quantities greater than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $1,000 and maximum $5,000 plus three times the tax payable and/or imprisonment up to 30 days but not less than 10 days.

Subsequent offence:
For quantities less than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $500, and maximum $5,000 and/or imprisonment up to 6 months.

For quantities greater than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $5,000 and maximum $10,000 plus five times tax payable and/or imprisonment up to 9 months but not less than 3 months.

Possession of marked tobacco:

First offence: For quantities less than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $200, and maximum $1,000 and/or imprisonment up to 30 days.

For quantities greater than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $1,000 and maximum $5,000 plus three times the tax payable that would otherwise have been payable if the tobacco was purchased in Nunavut and/or imprisonment up to 30 days but not less than 10 days.

Subsequent offence
For quantities less than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $500, and maximum $5,000 and/or imprisonment up to 6 months.

For quantities greater than 1,000 cigarettes, 250 cigars or 2,000 grams of any other tobacco the fine is at minimum $5,000 and maximum $10,000 plus five times the tax which would have been payable if the tobacco was not marked and/or imprisonment up to 9 months but not less than 3 months.

General
First offence: minimum $500 maximum $1,000 fine or/and imprisonment up 30 days but not less than 10 days.

Subsequent offence: minimum $1,000 maximum $5,000 fine and/or imprisonment up 6 months but not less than 3 months.

Marking/Tax Exempt
Tobacco for sale in Nunavut must be marked with the federal peach excise stamp.

Contact
For more information on Nunavut’s Tobacco Taxes email us at @email.