Sin taxes are typically used as a policy instrument to increase the cost of a product so as to influence consumer behaviour and raise government revenue. In some instances, excise taxes are regressive, and the rates of excise on alcohol typically grow at a faster rate than other taxes.
Genesis was approached by a major alcohol manufacturer and distributor to assess the appropriateness of excise tax as a tool to reduce harmful consumption and to raise revenue for the state.
Our team provided research and analytics that informed the client’s policy submission to the national government. On balance of the evidence we found that the tax was not inappropriate.
However, we provided the company with a shared-value strategy focused on reducing public and social harms of alcohol which could be put forward in lieu of a more moderate growth in sin tax.