Alcohol ‘sin tax’ increasing by 25 percent

From ‘Alcohol suffers stiffest hike among ‘sin taxes’, 22 Feb 2014, article by Jermyn Chow, ST

BARFLIES absorbed the sobering news yesterday that they will have to dig deeper to pay for drinks, with an increase on alcohol tax by 25 per cent. In the first such hike in a decade, the tax on wine and spirits goes up to $88 per litre of alcohol content, and for beer, to $60 per litre of alcohol content, with immediate effect.

It is the heftiest of the hikes on the so-called sin taxes, with cigarette levies also up by 10 per cent and betting duty rates up to 30 per cent from 25 per cent. Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said yesterday that the move is “in line with our social objective of avoiding excessive consumption or indulgence in these areas”.

…Lawyer Ranjan Indiran, 32, who spends $300 on drinks on weekends, argues that a person with an alcohol problem will not stop drinking just because alcohol is more expensive. “He will channel more money towards his drinking habit and he and his family will just be worse off,” he said.

The hikes on alcohol will net the Government $120 million more a year. Cigarette and tobacco levies will add $70 million and betting, $255 million.

In Feb 2006, PM Lee decided ‘reluctantly’ against increased taxes on tobacco because it didn’t make Singaporeans smoke less, but smuggle more. Unlike previous years, 2006 was an exception as hikes were frozen for booze and cigarettes, and offering a reprieve to drinkers and smokers didn’t seem ‘in line with the social objective’. 3 months later, the General Election was held. Another objective took precedence over public health then.

Though betting tax from lotteries also went up to 30%, no mention was made of the biggest generators of ‘sin’ money, the IRs. For elder hardcore addicts who qualify for the Pioneer Package, the payouts may come in useful. For rich expats who can afford a Jewel of Pangaea or those hobnobbing at F1 parties, this hike is a mere drop in their ocean of excess. The increase comes across as an opportunistic one following the fallout of the Little India Riot which made a convenient villainy out of alcohol. If a gambling addict is willing to pay $100 to enter a casino multiple times, an increase in at least 40 cents for a bottle of Tiger at the kopitiam is not going to make anyone quit the habit overnight. You may, however, think twice if you are a social drinker, and maybe that alone would be enough to make the difference between going home sober, or ending up in jail for drunk driving.

If you’re dead serious about public health and want to help those who really need to quit, you would have heeded the advice of SANA in the 1970s, when they advocated DOUBLING of the same sin taxes. You would curb the sprawl of ‘nightlife’ spots and impose some form of Preservation of Public Order Bill everywhere and not just Little India to clamp down on liquor/tobacco sales and rowdy behaviour. You would have stricter punishments for anyone caught with contraband, which incidentally spiked to 46,300 cases just in the first half of 2013 alone. You also wouldn’t try to sell off confiscated vodka at 75 cents per bottle as the Singapore Customs did in 2004. In 2003,  Dr Warren Lee, MP for Sembawang, suggested that there be a COE for cigarettes, an idea that itself sounds like it was conceived, well, ‘under the influence’.

The message sent from the sin tax increase may be borne out of good intentions, but I doubt it’ll serve its ‘official’ purpose. It just means poorer, not less, smokers and drinkers, but more revenue and ‘more good years’ for everyone else.

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One Response

  1. […] The Sentiment: Why we have to maintain our defense spending – Everything Also Complain: Alcohol ‘sin tax’ increasing by 25 percent – Leong Sze Hian: Analysis of some questionable points in budget 2014 – The Heart […]

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