Sin Tax Disadvantages

1139 Words5 Pages
Ongcoy, Mergilyn
Panta, Renelyn
Despite of the many evidences that support the topic, there are negative feedbacks that oppose the advantages of increasing the sin tax for tobacco and alcohol. One disadvantage of increasing sin taxes of tobacco and alcohol is that it decreases the income of the tobacco farmers.
There are a lot of arguments from social media and newspapers regarding the consuming of cigarettes and alcohols. However, according to Bordadora (2012), tobacco farmers will be affected because of the increase in prices. They will lose their job and decreased their income which will decrease their productivity level (Bongosia, retrieved 2015). This argument shows that if company suppliers of these products increase the price due to
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Tobacco farmers will not benefit from the increase of retail prices of cigarettes increase due to sin tax. The sin tax, like the value-added tax (vat) and other regressive taxes, will not have a trickle-down effect on the public," Neri Colmenares said. The law makers further warned that the tobacco tax hike will exacerbate the country's current unemployment problem (Silverio, 2014). The government is only looking at a one side of the coin in implementing the law on higher sin tax because it does not take into consideration the farmers who will be highly affected of the said tax hike. Farmers will not benefit if the price will increase instead it is considered as a threat to their livelihood. If the government wants to discipline the companies who distributed cigarettes and alcohol, as well as the smokers and drinkers, they must have to provide programs that will assist tobacco farmers to avoid the existence of higher unemployment rate of the country which is also massive nowadays. Therefore, looking at the positive side of this policy also creates a dark side not just for the companies and smokers and drinkers but will also affect…show more content…
Cigarette is already an addiction and increasing retail price is not the answer. Recto said in his reports that severely tax the sin products is not the answer (Essay, UK, 2013). The increase in sin tax is not actually helping the economy of the country and it does not meet its objective of diminishing smoke and alcohol consumptions. Thus consumers will shift to cheaper amount of these products. It is accepted that increasing sin taxes also increase the revenue of the government, however this idea is not applicable in the long run process.
The second evidence is connected in this evidence wherein smuggling will occur and bring cheaper products in the country because of higher prices of these products. According to Cruz
(2010), “When the price of any product rises excessively, smugglers bring in cheaper products. So instead of discouraging consumption, the very high prices actually encourage it because the smuggled products are very cheap” (Essay, UK, 2013). Due to the increase of price in cigarette and alcohol, consumers will look for an alternative brands which is cheaper. These will
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