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The duty and tax I had to pay turned out quite paltry (the tortourous part was waiting one and a half hours for them to calculate it – and endure lectures on why students shouldn’t touch alcohol).

But on the other hand, the libertarian part of me cries out injustice. Alcohol duties in Singapore are atrociously high, by any standard (that Malaysia’s about the same level doesn’t speak well of Putrajaya) – it is far above any conceivable social cost it is meant to tax out. Bunch of kids still get drunk at the Quays each weekend and public holiday, and taxi drivers still patronise their local kopitiam after their shift for a couple of bottles of beers.

It’s the latter point that bothers me: high taxes doesn’t really deter binge drinking (if anything, it makes it more alluring). Other than binge drinking and alcoholism, there isn’t any health problems associated with alcohol – the locals in Tioman and Langkawi don’t seem particularly more ill than those in other, similar, islands.

In addition to that, coming in from Malaysia doesn’t entitle you to any duty-free allowance in Singapore. It’s a bit perverse – those on a day trip from Batam or Bintan, a short ferry ride away, get an allowance. Flying in from Kota Kinabalu instead of Bandar Seri Begawan will lose you your allowance (despite the latter being further away). Its not that Malaysia and Singapore is in a customs union (even the short period Singapore was in Malaysia, it was a separate customs area) – Singapore alcohol duties is almost purely revenue-raising. With the bulk of travel being with Malaysia, granting an allowance to travellers – even those flying in from Malaysian Borneo – will diminish the revenue raising properties of the tax.

If the purpose of this ‘sin tax’ is to discourage unhealthy behaviour – it is clearly not working: there is no evidence higher prices reduces binging and dependency. If the purpose if to internalise the social cost – it is excessive. If the purpose is to raise revenue – it is highly unfair because it is extremely regressive (there is no reason why alcohol drinkers should fund high ministerial pay or lift upgrading more than teetotalers).

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5 Comments

  1. RIP

  2. RIP Rajan

  3. Rip brother

  4. Good riddance to bad rubbish.


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