Kropiwnicki: increase in excise not to give higher tax revenues

The increase in excise tax on alcoholic beverages and tobacco products will not give higher tax revenues or will not be an effective tool to fight addictions, as Jerzy Kropiwnicki, member of the Monetary Policy Council (RPP),  commented the planned excise tax increase.
In November, the Sejm adopted an amendment to the Excise Duty Act prepared by the government, which provides an increase for 10 percent in excise duties on alcohol and tobacco products. According to the government, after January 1, 2020, a price of a half-liter bottle of vodka may increase by approximately PLN 1.4, and of a pack of cigarettes by approximately PLN 1. The budget is to gain around PLN 1.7 billion. According to the Ministry of Finance, the change will also have a positive impact on health policy and reduce the negative effects of consuming alcoholic beverages and smoking tobacco products.
Kropiwnicki wrote on his blog that prominent representatives of state authorities commented on the decision to raise excise duties on alcohol and tobacco in two ways – some suggested that it was a tool to combat harmful addictions, others (there were more) claimed that thanks to these revenues of the state budget would increase.
“Unfortunately, there will be no such effects. Neither of them,” Kropiwnicki said.
In his opinion, the first commentators sinned with naivety, while second with a disregard for economic knowledge and historical experience.
(PAP)