Sask. cuts back tax-free tobacco on reserves

Saskatchewan is limiting the amount of tax-free tobacco sold on First Nations.

Saskatchewan is lowering the amount of tax-free tobacco available for sale to Aboriginal people in the province.

Effective July 1, Status Indians holding a treaty card can buy up to one carton of tobacco, or about 200 cigarettes a week, tax free.

Previously, First Nations smokers could buy up to three cartons of cigarettes a week.

The move, announced in the March 2010 budget, is part of an effort to recapture $5-milliion to $7-million in annual taxation revenue the province estimates it loses to black market tobacco sales and inter-provincial smuggling.

The new lower limits on tax-free tobacco sold on reserve will take effect on July 1.

Packages of cigarettes and fine cut tobacco that are purchased tax-free on-reserve by Status Indians will also have peach-coloured tear-tape markings to distinguish them from the beige-coloured tear-tapes used on tobacco products that are taxed.

The move should help prevent tax-free tobacco from being sold to the general public. "These changes are part of the government's overall tobacco strategy to help reduce tobacco usage in Saskatchewan," Finance Minister Rod Gantefoer said.

Finance Department spokesman Randy Burton said the government is also working on improving the computerized system it uses to monitor sales of tax-free tobacco on reserves.