A higher tax on alcohol does not necessarily deter drinkers

The letter to the editor that urges the government to reduce the tax on alcohol has its valid point. He gave an example of the repercussions attributed to the price and tax increase on cigarettes. Illegal contraband is now quite common in the country.

The same phenomenon is applicable to alcohol. There is an optimal tax threshold that can be tolerated by the majority of consumers. They will most probably find alternatives when the price is too high and usually there is a supply pipeline in the waiting when there is a demand. That will defeat the purpose of the high taxes and the revenue received from the sin tax would remain static at a certain level.

Alternatives to legitimate alcohol would also rear its head, for example diluted versions or mixtures from unknown origins. That would put the lives of the drinkers at a greater risk as they would not realise the beverage they are drinking are of dubious origins and might not have passed stringent quality controls.

Home brews might even be popular if drinkers are desperate enough to have their usual drink or two. If this is widespread, we would need an increasing number of personnel to make checks on their illegal activity. The government wants the revenue but if drinkers go undercover and support a black market, all future development plans that is tied with the increased anticipated income would have to be redrawn.

Alcoholic consumption is part and parcel of certain cultures and slapping a huge tax bill on them would raise objections. Furthermore, the increase in the tax bill will not deter habitual drinkers. The drinkers would still find a way just as the smokers have managed to continue with their habits in a cheaper fashion.

The current gory pictures on cigarette packs have not deterred smokers, past, present and future to continue indulging in the habit. The same can be said regarding alcohol consumption. A reasonable tax rate will give some form of control to the industry and prevent contraband from taking over. Meanwhile, a continuous effort to educate the public that anything in excess should be avoided should be the rallying call. Moderation is acceptable.  

Image from aac