Trinidad and Tobago: Recent beer tax hikes has no effect on consumption

Recent tax hikes on beer and cigarettes in Trinidad and Tobago have not affected consumption of these two items and have actually contributed to increased Government revenue from the two areas, Finance Minister Colm Imbert was quoted as saying by the Trinidad Guardian on February 7.

But there’s been no increased revenue following tax hikes on rum/spirits, he added during a Senate contribution.

Imbert spoke about the situation, in dealing with orders to finalise tax hikes on beer, cigarettes and rum/spirits. These had been announced last year in the 2017 Budget. The orders apply to customs import/excise duties on the products including from the Caricom area.

Among reasons was to curb excessive consumption of cigarettes particularly. Imbert noted it cost $500,000 to treat one lung cancer case.

Imbert said despite the increased taxes on beer, there was no apparent decrease in consumption, but rather, increased revenue from this area.

He said revenue from this item stood at $47 million over October/ December 2015, but rose to $55 million over the same period in 2016 following the tax hike.

Imbert said revenue collection was also up for cigarettes despite higher taxes on the product. Revenue for October/December 2015 was $50.8 million. This rose to $58 million over the same period in 2016, despite the increased taxes.

But he said no such response was noted where rum/spirits were concerned. Revenue for this was $57 million over October/December 2015 and $36 million over October/December 2016.

Imbert said existing stock may have been sold off. He said a better idea may be obtained via revenue collection from the first/second quarters of 2017 when he’d be able to say for certain if the tax hikes really affected consumption.

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