Maroc - NEWSDAY.CO.TT - A la Une - Hier 10:13

A smart and necessary move: Taxing luxuries to fund necessities

THE EDITOR: The latest measure from the government to raise taxes on alcohol and tobacco in the 2025-2026 budget isn’t just a financial decision; it’s a commendable leap towards a more responsible and fair economy. In a country that has frequently highlighted the need to move beyond a shaky energy sector for revenue, this policy really puts that idea into action. At the core of this initiative lies a pivotal question: What’s truly essential or necessary? Is it more crucial that we have access to alcohol than that low-income families can afford food? Is tobacco more important than ensuring our hospitals have the latest CT scanners and life-saving dialysis machines? Are high-priced imported beers and spirits really more vital than equipping our children with laptops, interactive classroom technology, and cutting-edge educational AI? The answer? We all know it’s a clear and loud " no." This new policy aims to align our spending priorities with what the nation truly needs. By introducing a “sin tax” on non-essential and frankly harmful goods, the government is sending a strong message: Public health and financial health go hand in hand: Raising prices on cigarettes and alcohol can decrease their consumption, which directly benefits public health. This also helps alleviate the burden on our healthcare system, freeing up funds for critical areas. It’s a forward-thinking approach that tackles both health and financial issues head-on. Saving foreign exchange for what matters: Taking care of our foreign exchange reserves is especially savvy. Every dollar spent on imports like scotch whisky or fancy foreign beers is one less dollar available for essential medical tools, educational innovations, or agricultural enhancements that contribute to food security. This policy encourages us to use our limited forex reserves wisely, focusing them on areas that will make our nation stronger and more self-reliant. We should revise legislation around duties for imported alcohol and cigarettes as part of this effort. Levelling the playing field for local producers: While the tax increases are applicable across the board, they naturally offer an edge to local businesses. A domestically produced rum or beer becomes comparatively more affordable next to imported options. This not only safeguards local jobs in the sector, but also boosts local production, which is a fundamental element of genuine economic diversification. Looking ahead: Strengthening and implementing The push for the “next phase” is vital. This initiative can’t be a stand-alone effort. For it to truly succeed, it needs to be woven into a broader strategy: Fighting illicit trade: With any tax hike on these products, there’s always a chance of fuelling the black market. It’s crucial that the government enhances the Customs and Excise Division with modern tools, scanners, and strengthened enforcement. These are not just add-ons; they’re essential for the success of this revenue initiative. Expanding the idea: This should be just the start. Applying similar reasoning to other non-essential imports – think high-end electronics, luxury fashion, and exotic cars (the budget already touches on luxury electric vehicles) – could widen our revenue base and optimise forex expenditure. Considering Caricom dynamics: The suggestion to look beyond Caricom is strategically intelligent. Supporting regional trade agreements while applying pressure on imports from outside the bloc is a balanced way to promote regional unity and defend national interests. Revising duties on alcohol and tobacco isn’t just a budgetary adjustment; it symbolises a new mindset emerging. It shows a government that’s willing to make tough yet necessary decisions, aiming for the long-term well-being of the nation over fleeting popularity. It's a statement that says, “We’re financing our kids’ education and our citizens’ healthcare, in part, through taxing our vices.” It’s a practical, justifiable, and, in the end, responsible policy. As was rightly pointed out, we’ve got to start somewhere. By kicking off this initiative with non-essential luxuries to fund public necessities, the government has embarked on a crucial first step towards the economic justice it promises. Kudos to the government! ELIJAH MOTIERAM via e-mail The post A smart and necessary move: Taxing luxuries to fund necessities appeared first on Trinidad and Tobago Newsday.