“Sin taxes”: Do they have the power to drive the intended economic behaviour?
Date
2011-05-05
Authors
Dlamini, Kenneth
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Abstract
The purpose of the study is to investigate if taxing consumer products is the correct tool
to use to drive consumer behaviour. The case study looks at the use of “sin” taxes in the
South Africa context (2000 – 2005). The goals of the study were to establish the reasons
for using “sin” taxes, to understand the economic contribution “sin” taxes make to
overall revenue and GDP, and also to test if the use excise duties on beer has changed
consumer behaviour towards drinking alcohol. Using excise duties has not produced the
desired results because most excise duties are transferable to the consumer and the
products they are levied on are highly price inelastic. To effectively control the use of
alcohol the government would have to consider using a combination of strategies such
as increasing age restriction, banning sale of alcohol on Sundays etc
Description
MM - P&DM
Keywords
Sin taxes, Consumer behaviour, Excise duties