How far should ‘sin taxes’ extend
The Indian government is considering the introduction of another tax on tobacco products and alcohol – a so-called ‘sin tax’.
According to a story in the latest issue of the BBM Bommidala Group newsletter, the designated sin tax would be used to finance part of the health budget during the 12th five-year plan, 2012-2017.
The 12th plan document, which is to be submitted to the National Development Council (NDC) presided over by the Prime Minister, Manmohan Singh, says that the extra duty could help reduce the consumption of tobacco and alcohol.
The NDC is scheduled to meet on December 27 to discuss the proposal.
The designation ‘sin tax’ would seem to be problematic. Questions no doubt will be raised as to who gets to decide what is and isn’t a sin (rather than a crime), something that in most places is the province of authorities that play only an advisory role in society.
But if the beliefs of these authorities are to form part of the basis of taxation policy, another question will be: What products or indeed activities will be taxed next?