Tax Working Group identifies the regressive nature of tobacco taxes on poor

The Tax Working Group has identified one of the governments tactics in their war on poor is via tobacco taxes, which are highly regressive: Quote:

An overlooked section of last week’s tax report takes aim at the government’s policies on?tobacco taxes.

Tobacco excise rates have increased by 10 percent above inflation each year since 2010, and this is scheduled to continue til 2020.? ?

But in its interim report, the Tax Working Group said this was a regressive tax, taking a proportionally greater amount of tax from those on lower incomes.

“There is a substantially higher prevalence of smoking in the poorest areas of our country,” the group said.

“Although increases in the rates of excise may encourage some individuals to cease smoking, the heaviest burden of the excise increases will be borne by low income earners who continue to smoke.

The Tax Working Group also said research showed reduction in smoking was expected to be quite small relative to the size of the increases in the excise rates.

“The group believes the government should therefore prioritise other measures to help people stop smoking (such as educational campaigns and regulatory measures) before considering further large increases in tobacco excise rates,” the report said.

It said some of the revenue from the tobacco tax could be directed towards quit smoking programmes. End quote.

The population is rising faster than people are stopping smoking. While the statistics show fewer people are smoking it isn’t because of higher taxes. I pointed this out years ago to a select committee. Increasing tobacco taxes isn’t resulting in fewer people smoking anymore. It is just socking the poor.

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