Budget 2014: Puzzled by hefty rise in alcohol tax

I am puzzled by the hefty 25 per cent rise in alcohol tax, compared with the more modest increases in cigarette levies (10 per cent) and betting duty rates (from 25 per cent to 30 per cent) ("Alcohol suffers stiffest hike among 'sin taxes'"; last Saturday).

Finance Minister Tharman Shanmugaratnam said the move is "in line with our social objective of avoiding excessive consumption or indulgence in these areas".

Even if the tax hikes can be justified, what is the reason behind the big difference in increases?

Surely, tobacco is more damaging to health than alcohol, assuming a moderate consumption of both.

Red wine and certain tonic liqueurs, when drunk in moderate amounts, can generate health benefits, whereas smoking offers no health benefits whatsoever.

The Government has often advised moderate and responsible consumption of alcohol, while encouraging people to quit smoking, even as it imposes smoking bans at more places.

Hence, the significant difference between tax increases for alcohol and tobacco appears to contradict the Government's stance on drinking and smoking.

Trent Ng Yong En

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