Yet, another thing appears quite predictable about Sri Lankan Budgets over the last few years. With every Budget, and non-budget, the increase in the prices of such commodities by gazette notification has simply become a case of expecting the expected.
Spare a thought for our embattled government. The whole beleaguered caboodle appears to be in a pathetic state. As if its hierarchy did have enough on its plate, it was beset by the recent back-to-back disasters. Now, it has to contend with rebuilding and resettling the victims of both calamities.
But reconstruction and resettlement cost money and that is a commodity the ruling administration is woefully short of, given the colossal salaries and perks it splurges on its ministers to boot. The snag is that the kitty is as bare as old Mother Hubbard’s cupboard. So, two weeks ago, the powers that be reached an agreement with the International Monetary Fund (IMF) for a US$1.5 billion bailout to help it avert a balance of payments crisis.
That would be certain to help in the short term perhaps but for how long from a continuing perspective is the big question.Besides, where in blazes do they expect to find the money to begin such large scale reconstruction for these additional unanticipated adversities? Judging by recent fiscal trends, the answer would be quite simple really for a perceptive mind. That is because one does not have to gaze into a crystal ball to surmise that it will take the easiest and most predictable way out by imposing pre-budget ‘Sin Taxes’ on tobacco, alcohol and beer.
Yet, another thing appears quite predictable about Sri Lankan Budgets over the last few years.
With every budget, and non-budget, the increase in the prices of such commodities by gazette notification has simply become a case of expecting the expected. In Sri Lanka, taxes on citizens can be raised without consultation outside the annual budget through a so-called ‘midnight gazette’ literally concocted while citizens are sleeping. Taxes had been imposed on even certain basic necessities such as essential foods outside last year’s 2016 Budget, a practice which became widespread of late, worsening the uncertain lives of the citizens. And it goes on regardless despite the fact that such a gambit is a fundamental violation of the principle of ‘taxation by consent’ practiced by free countries.
This despicable fiscal policy is usually implemented ahead of the reading. As usual the price hikes will remain craftily concealed during the actual presentation. That has been a certainty given the predilection of all finance ministers to resort to an ‘easy come’ source of revenue, forcing smokers to resort to the more hazardous beedi and the illegal and dangerous gut-rotting moonshine, kasippu. Anyone with a smidgen of economic know-how will be aware that any type of price hike or prohibition would be sure to create a burgeoning black market for taboo merchandise. The underground market even now is sucking a phenomenal amount of wealth out of the economy and into the pockets of ‘illegal’ importers and manufacturers of smokes and alcohol.
For instance, Sri Lanka which imposes the world’s highest tobacco tax, in 2002 learnt a good lesson from the elusive black market. But the policy backfired with smokers switching to cheaper bootleg brands and puffing away like never before. Basically, it was the treasury that appeared to have suffered a heart attack with the ‘smoke more, pay more’ policy backfiring on the government despite more people smoking cigarettes, but not always the duty-paid brands.
After years of gradually increasing tobacco taxes to take 85 per cent of the retail price of every cigarette, the government then announced a U-turn in its excise tax policy that drastically reduced cigarette prices by 42 per cent.
There was a lesson there but when do our authorities ever learn? When cigarettes are taxed so high, they become unaffordable to many of its addicted patrons and as a result black markets are created. Drugs dealers are now choosing to sell smuggled cigarettes, instead of drugs, because cigarettes are more profitable.
Now, I’m against underage smoking. It’s strictly an adult decision. But higher cigarette taxes and prices enable underage smokers easier access to tobacco products. Let me explain: There are laws that call for tobacco sellers to ask for proof of ID when selling tobacco products. This prevents minors from getting a hold of them. Do you really think drug dealers, turned illegal tobacco traders will ask for ID?
You can actually buy a packet or carton of cigarettes of illegally imported quality British cigarettes at a fraction of the price of the substandard locally produced Gold Leaf sticks.The CTC does not seem to have made an attempt to clear the smoke from the controversial public health issues or rebutting the various scientifically unfounded claims made by the fascist led anti-smoking movement either. All it did was to whinge and make a deal with the administration to ban the sale of quality duty free fags on arrival at the Colombo Airport.
Surely with its massive resources it seems to be fighting shy of taking on the pharmaceutical and pollution pervading oil industry which have being donating hundreds of millions of dollars to organizations that lobby for smoking bans. Imagine the amount of poisonous carbon monoxide we all inhale day after day, month after month for as long as we have existed. Has this been an exercise in philanthropy on the part of the caring pharmaceutical and oil industries?Not exactly.For instance, big Pharma is an industry every bit as profit-driven, cutthroat and devious as any other global industry.
Smoking bans represent a lucrative market opportunity for Nicotine Replacement Therapy (NRT) products – nicotine patches, nicotine gum among others – to be maximized at all costs, collateral damage notwithstanding. The hundreds of millions Big Pharma spends in funding anti-smoking and general smoking-ban is small beer when set against the profits from sales of NRT and smoking cessation products.
The ongoing anti-smoking campaign is not about public health, drug abuse, or teen smoking. What it is all about is money, control and jurisdiction. What many seem to forget is that demand fuels supply, not the other way around.