Friday, March 4, 2011

Sin tax gets public support-Denmark

Sin tax gets strong public support

Higher fees on cigarettes, booze and junk food would lead to rise in smuggling and cross-border shopping
Duties on cigarettes, booze and unhealthy food are too low, say most Danes, according to Epinion/DR poll.
The poll came on the heels of a new calculation from the Tax Ministry that the the price of cigarettes adjusted for inflation had fallen by nearly ten percent since 2002. The price of alcohol fell in the same period by about 15 percent.
Some 72 percent of people said fees on cigarettes ought to be raised. A smaller proportion, but still a majority at 59 and 58 percent respectively, thought alcohol and junk food should also bear heftier duties.
Despite the apparent public support, a hike in the sin tax is unlikely to come soon, however.
“The very same people who want higher duties will jump in their cars and drive over the border where prices are lower to go shopping, just as soon as we raise the duties. There is a limit to how high duties can be and we are already at that limit,” said Karsten Lauritzen, member of the tax committee and the prime minister’s Liberal Party.
The opposition proposes raising duties on cigarettes and junk food, but not on alcohol, according to Social Democrat René Skau Björnsson.
“If we raise the fees on alcohol, we run the risk that cross-border shopping will rise even more, and then we won’t get any benefit out of it. That’s why we propose beginning with cigarettes and junk foods.”
The connection between higher duties and increased cross-border shopping is well documented, according to the government’s Prevention Commission. On the other hand, so is the connection between higher cigarette prices and less smoking.

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