The Government has imposed this tax burden to encourage people to be mindful of their health and take ownership of their lifestyle.
Treasurer Patrick Pruaitch when presenting the 2017 Budget in Parliament today said the consumption of alcohol and tobacco has associated social implications which the Government continues to face through increased funding for law and order, manpower, free primary health care, social awareness and education.
More so, he said the consumption of such goods contributes to poverty and wasteful expenditure.
“In this vein, the 2017 Budget will increase the alcohol indexation cap from 2.5 per cent to a fixed rate of 5 per cent biannually while the tobacco excise base rates will have a one-off increase.
Pruaitch added that this initiative is not without risk but there is possibility of people resorting to cheap illicit alcohol and tobacco.
He said as a responsible government, a Task Force will be set up to combat illicit tobacco and alcohol activities in 2017.