The Government can and should, in the short term, progressively increase taxes on alcohol, tobacco and sugary drinks for health reasons.
The Fiscal Review Committee stated this in their report adding it is possible that taxation of these “sin goods” may reach a point at which they are counter-productive.
They say it would be a useful matter for study but in the meantime both revenue and long-term health imperatives should continue to drive the policy on this special class of goods.
The committee recommends that larger motor vehicles (1,500 cc and above) and luxury motor vehicles (2,000 cc and above) generally have less social utility and should bear the highest duty rates, particularly at a time when sacrifice is being demanded of everyone.
They say fiscal duty and import excise structures should be reviewed with the aim to widen excises on fuel products and motor vehicles.
The report further says increases to address environmental concerns should also be considered.
They say reforms should be made progressively over the medium term (from 2 to 5 years), with clear outlines of plans and timelines to businesses and stakeholders to enable them to adapt.
The committee also says concessional and protective duty rates to support specific industries and targeted activities should continue for the next five years, particularly for hotels and tourism, agriculture, manufacturing, renewable energy, BPO enterprises, hospitals and health services, education, sports, charities and NGOs.
The National Budget will be delivered at 10am Friday.
