THE Government should resist the call which came this week from the tobacco industry to reduce cigarette taxes, however much it might staunch the loss to its revenues from growing sales of contraband goods.
The Tobacco Institute says it is concerned about the loss of an estimated $700 million in tobacco tax each year. Presumably, it is at least a little bothered by its member companies' estimated 30 per cent loss of market share to smuggled cigarettes.
That figure should anyway be treated with caution, since much of the contraband was manufactured in Hong Kong. Distributors and retailers have been hit hardest.
The trouble with the institute's argument that cutting taxes would make smuggling less profitable is that it also would make smoking more affordable, particularly for youngsters. It would lead to an increase in smoking.
The Government should not give boosting its revenues priority over public health. The best way to reduce smuggling (and thus collect taxes) is the old-fashioned one: catch the culprits and impose stiff, exemplary sentences.
