Question

tobacco is a common target of sumptuary tax in Lesotho. explain the economic rationale behind heavy taxes on this commodity.

Answer 1

Sin tax is used for taxes on activities that are considered socially undesirable. In many cases, sumptuary taxes are implemented to mitigate use of alcohol and tobacco, gambling, and vehicles emitting excessive pollutants. Sumptuary tax on sugar and soft drinks has also been suggested; see soda tax.[2] Some jurisdictions have also levied taxes on recreational drugs such as marijuana.[3]

Revenue generated by sin taxes supports many projects imperative in accomplishing social and economic goals.[4] American cities and counties have utilized funds from sin taxes to expand infrastructure,[5] while in Sweden the tax for gambling is used for helping people with gambling problems. Acceptance of sumptuary taxes may be greater than income tax or sales tax.

Answer 2

There is high rate of consumption of tobacco in Lesotho. Since  tobacco and alcohol are addictive items which are associated with the health of the people and are considered not desirable by the society they have heavy taxes

Explanation:

• The  sumptuary tax are a form of additional excise tax is normally put on items  or goods and services that becomes like an addictive habit for the people and it seen by society as harmful and not desired. The sumptuary taxes are put on the items like selling of tobacco,alcohol, food which is not healthy and forms of gambling.
• There are are important social notices that are taken out with informing the people regarding the ill health associated with consuming of Tobacco and alcohol. Majority of the workers and people are addictive to tobacco and alcohol in Lesotho. Tobacco is considered as non-essential luxury items and considered not desirable by the society. That is why the government has put heavy taxes for these commodities in Lesotho for reducing health problems among the people

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