The Commutation Act 1784, enacted by the
British Parliament, reduced the tax on
tea from 119
% to 12.5%, effectively ending the smuggling trade.
William Pitt the Younger, acting on the advice of
Richard Twining of the
Twinings Tea Company, introduced the Act to increase revenues through legitimate sales of tea by ending 100 years of punitive tea taxes which promoted smuggling.
The Act was created to stimulate trade in
China
China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
for the
British East India Company, which at the time was suffering from mounting debts. Indian
opium
Opium (or poppy tears, scientific name: ''Lachryma papaveris'') is dried latex obtained from the seed capsules of the opium poppy ''Papaver somniferum''. Approximately 12 percent of opium is made up of the analgesic alkaloid morphine, which i ...
was exchanged for tea in China which was then shipped to Britain for sale on the domestic market.
The Commutation Act improved trade relations between Britain and one of its primary tea suppliers, China.
Notes
History of tea
Smuggling
Great Britain Acts of Parliament 1784
History of taxation in the United Kingdom
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