Alcohol tax in S'pore raised by 25% in Feb. 2014, alcohol consumption level still the same

Singaporeans are no teetotalers.

Belmont Lay| September 15, 12:05 AM

On Feb. 21, 2014, alcohol tax in Singapore was raised 25 percent with the explicit aim of moderating consumption and for the government to keep pace with consumers' rising incomes and purchasing power by raising duties.

However, instead of getting people off booze, nothing apparently has changed.

It has been revealed -- based on Singapore Customs data -- that alcohol consumption only managed to dip sharply initially by some 28 percent in March with only about 8 million litres bought.

In April, the numbers shot back up again, with 10.7 million litres bought.

Here's an official explanation why Singaporeans, by and large, are no teetotalers.

From The Sunday Times on Sept. 14, 2014:

"These products generally have some addictive quality, or they have few substitutes," said Nanyang Technological University economist Walter Theseira.

Moreover, to cope with the price increase, Singaporeans are turning to cheaper beer with stronger brews.

These beers include Anchor Strong and Indian beers such as Kingfisher, Godfather and Knockout.

Curiously, there appears to be a contradiction in the last paragraph of the ST article:

"So far, tax collected from the ramped-up liquor and cigarette excise duties has been falling short of the levels projected by the Government in February."

Question: So, if taxes have gone up and alcohol consumption levels have held steady as before tax increase, and yet the tax collected is still falling short, what was the Government hoping to have happened?

For consumption to increase even with higher tax?

But doesn't this contradict the liquor duties aimed at moderating consumption in the first place? Unless, of course, the government wasn't counting on Singaporeans switching to cheaper beers.

But that's highly unlikely, given how our government likes to think they can anticipate anything.

 

Top photo from here

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