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The UK government taxes alcohol and tobacco to generate revenue and discourage addiction. All sales of these goods within the UK are subject to government-set tariff rates. This article examines the impact of these taxes on consumers and the economy.
Alcohol duties
Did you know that in the UK, all alcoholic drinks like beer, wine, cider, and spirits are taxed? The amount of tax depends on the strength and type of the drink, so if you’re into stronger drinks, you might end up paying more. For example, in 2021, the tax on a liter of spirits with a 40% alcohol by volume (ABV) was £28.74, while a liter of beer with a 5% ABV was only taxed at £0.54.
The government raises or lowers taxes on alcoholic drinks yearly according to inflation. The government is taking measures to address the issue of excessive drinking. One such measure was introducing a new minimum unit price for alcohol in Scotland in 2018. It was applied to Wales and England in 2021. This policy sets a minimum price for each alcoholic drink to discourage using cheap and strong drinks. The taxes on alcohol and cigarettes in the UK was the same in 2022. Duty rates may increase yearly to keep up with inflation.
Tobacco Duties
All tobacco products supplied in the UK are also subject to duties. It includes cigarettes, cigars, and hand-rolling tobacco. The kind of goods and their weight or volume affect the duty rates. For instance, the tariff rate in 2021 was £5.98 for a pack of 20 cigarettes and £315.62 for a kg of hand-rolling tobacco.
Impact on Consumers
Alcohol and cigarette goods are quite expensive in the UK due to the high tariff rates. It might stop some buyers, especially those with less money. It may also lead some customers to buy low-quality products or turn to the black market.
Duty rates may affect customers who struggle with alcohol or cigarette addiction. Some people might use less if the prices go up, but we have to think about how hard it is for those who are# struggling to make ends meet. Higher prices can hit their wallets hard. It also can have unexpected results, such as increased crime or poor health.
The government has banned smoking in public areas and simplified the packaging of cigarettes. They have also raised the minimum age for purchasing tobacco products to 18.
Economic Effects
In 2020-21, the total revenue generated from alcohol duties was approximately £10.5 billion. The revenue from tobacco duties was approximately £9.5 billion. These figures may vary yearly depending on changes in duty rates, consumption patterns, and other factors.
Conclusion: Did you know that smoking and drinking can add up to medical expenses, lost productivity, and harm to society? So it’s no wonder some people think the government should crack down and raise taxes to discourage their use. But get this: the costs of smoking and drinking outweigh the taxes generated.
That’s why the UK government puts a tax on alcohol and cigarettes that applies to all sales across the country. They hope to discourage people from overusing these products and generate serious revenue for the government. But, of course, it can be pricey to buy these things, so it’s important to find a balance in tax rates that takes into account public health, revenue, and consumer affordability. This approach can benefit everyone involved – consumers and the economy alike.