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(Trinidad Express) The Government has voted to approve higher excise duties on alcohol and tobacco products. Finance Minister Davendranath Tancoo moved the motion in the House of Representatives on Friday, formalising measures first outlined in his national budget presentation on October 13. The motion had already been approved in the Senate on October 29. During his presentation on Friday evening, Tancoo said the Government was intending to use five resolutions to increase local and Caricom rates of customs and excise duties by 100% on various alcoholic beverages and tobacco products. “Before us today, therefore, Mr Speaker, we are only dealing with import duties as is clear by the name of the resolution and not export duties. Thirdly, in relation to Caricom, the Customs Act incorporates into our domestic law the Caribbean common market established under the annexe to the treaty of Chaguaramas,” Tancoo said. Tancoo said that, as it currently stands, goods produced in other Caricom countries and imported into Trinidad and Tobago, except for alcoholic beverages and tobacco products, usually enter duty-free.. “Alcoholic beverages and tobacco products produced in other Caricom states, however, are taxed at the same rate as if they were produced in Trinidad and Tobago and this principle promotes free movement,” Tancoo said. Tancoo said the excise duty rates increases were exactly the same as Caricom import duty. He said the last time the excise duty rates on alcohol were increased was in 2016. “That means that for nearly ten years alcohol rates have not been increased, but the variety, value and quantity of alcohol imported and sold in Trinidad and Tobago has increased substantially.” Tancoo stated. He pointed out that for tobacco products there were increases in 2016 and more recently in 2020. He said that those products have also seen an increase in variety, value, and availability. Tancoo said that when he introduced the proposal at the October 13 budget presentation, he presented it as a tool to generate revenue. Tancoo noted that apart from tax generation there would be other benefits to the citizenry, including less consumption and healthier living. He said it could reduce the burden on the State’s healthcare system and ultimately lead to a healthier society in Trinidad and Tobago. Quoting from a November 2010 article in the American Journal titled “Effects of Alcohol Tax and Price Policy on Morbidity and Mortality: A Systematic Review,” Tancoo said the authors found that alcohol consumption was linked to violence, road fatalities, risky sexual behaviour, other drug use, and crime. Tancoo said there were studies conducted by the World Bank that showed that taxing those products could lead to less consumption. “Yet another World Bank study entitled ‘Reducing Tobacco Use in Trinidad and Tobago: Modelling the Long-Term Health and Economic Impact’ indicated that a sustained increase in tobacco taxing could prevent more than 2,500 new cases of smoking-related cases by 2035, saving the national health system approximately $250 million,” Tancoo said. In response, the Member of Parliament for Diego Martin North/East Colm Imbert said that the move could hamper the development of tourism on the island since rum was cheaper on other Caribbean islands. However, MP for San Fernando West Sean Sobers responded by saying that tourism did not depend on cheap alcohol. Diego Martin West MP Hans Des Vignes suggested that the Government consider raising taxes by 50%, with a further 50% increase at a later date to give the population time to better absorb the change. He noted that several businesses were already closing their doors because of the sudden increase. No other speaker contributed to the debate. What Tancoo said in the budget “Mr Speaker, the cost of administering and offering public services in Trinidad and Tobago has risen significantly across ministries, departments and agencies. Notwithstanding, many administrative charges, including licence and permit fees and processing charges, have remained unchanged, in some instances, for as long as 30 years,” Tancoo said then. He said this places additional pressure on the Consolidated Fund. “Updating the fee structures in line with the current cost of doing business is therefore necessary to ensure cost-reflectivity, fairness and sustainability, while also safeguarding service quality and enabling modernisation. It is important to note that 80% of the projected revenue increases are attributable to Customs Duties on Rum and Spirits, Beer and Tobacco products,”: he said. Tancoo announced that excise duties on cigarettes would rise from $5.26 to $10.52 per 20-pack, as well as the doubling of taxes on spirits and alcohol, from 79.25% to 158.5% of alcohol content, while beer duties increased from $5.14 to $10.28 per unit. Angostura and Carib have already increased the prices on their products. The West Indian Tobacco Company Ltd (Witco) has also raised the minimum price for a pack of cigarettes to $24, according to its latest suggested retail prices.
