Recent tax hikes on beer and cigarettes have not affected consumption of these two items and have actually contributed to increased Government revenue from the two areas, Finance Minister Colm Imbert said yesterday.
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.
He said beer drinkers/smokers didn't have wider substitute options " ...apart from a plant-like substance....if you smoke and drink (beer) you don't have many options unless you get involved in illegal activity."
Imbert said Government also noted an increase in hybrid car importation - from 20 to 453- after recent tax concessions on that.
However Opposition Senator Wade Mark slammed Government on the tax order which he said was not delivered to Parliament within 21 days of announcement, as he claimed the law stipulates. He said it was delivered on November 15, 23 days after the tax order was announced in the 2017 Budget.
Further, he said the order as only now being presented to the Senate yesterday - 91 days after the initial announcement.
Mark said the Opposition couldn't support anything illegal. He called on the Government to say if it would refund payments on the tax hike made by customers, merchants and other countries which purchased the goods.
He said when the matter was raised before, Government had promised to get a legal opinion on it. He said the Opposition had obtained the order "by innovative means" and found that the Treasury Solicitor who gave it had advised the Government to check with Parliament officers on the matter also.