Commutation Act 1784

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.^[1]

Commutation Act 1784

Act of Parliament
Parliament of Great Britain
Long title	An Act for repealing the several Duties on Tea, and for granting to His Majesty other Duties in Lieu thereof, and also several Duties on inhabited Houses, and upon the Importation of Cocoa-Nuts and Coffee, and for repealing the Inland Duties of Excise thereon.
Citation	24 Geo. 3. Sess. 2. c. 38
Dates
Royal assent	20 August 1784
Repealed	6 August 1861
Other legislation
Repealed by	Statute Law Revision Act 1861
Status: Repealed

The Act was created to stimulate trade in China for the British East India Company, which at the time was suffering from mounting debts. Indian opium 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.