Kathmandu :

Governments around the world are strapped for cash. Finance ministers, find liquor and tobacco the easiest ‘sins’ to tax. Who can object? Cigarette and liquor companies should be glad they are allowed to exist and be happy that they are merely taxed. Right?

Wrong. The higher the taxes on ‘sins’ the more difficult it is for them to serve any purpose. Ban smoking and drinking and all you do is to drive the liquor and cigarette trade into the hands of criminals. Whether it be Nepal, India or the US, people do not like to be dictated to and will not give up their habits. We have the right to do what we want with ourselves.

Prohibition, wherever it might be enacted, lea-ds to gangs and thugs co-ntrolling the supply and distribution of liquor, and corrupting the enforcers. Tragic deaths result as people drink illicit spirits manufactured clandestinely without regard to quality. Consum-ption is not curbed. In, 1920, the US enforced prohibition. Mafia spre-ad its tentacles across America. Money earned from the illegal liquor sales helped it to establish itself in many other illegal activities as well. Those were the days ma-de famous by Al Capone and Bugs Moran — the most notorious and ruthlessly efficient suppliers of liquor.

Nobel laureate economist Milton Friedman talks about that era in Free to Choose: — Who were their customers? Who bought the liquor they purveyed illegally? Respectable citizens who would never themselves have approved of, or engaged in, the activities that Al Capone and his fellow gangsters made infamous. They simply wanted a drink. In order to have a drink, they had to break the law. Prohibition didn’t stop drinking. It did convert a lot of otherwise law-abiding citizens into lawbreakers. It did confer an aura of glamour and excitement to drinking that attracted many. It did suppress many of the disciplinary forces that ordinarily protect the consumer from shoddy, adulterated, and dangerous products. It did corrupt the minions of the law and create a decadent moral climate. It did not stop the consumption of alcohol. States in India continue to experiment with prohibition — on and off. Be it Gujarat, Maharas-htra, Tamil Nad-u or Haryana, experiments with prohibition go on. Will they ever learn? Whether it is outright bans, restrictions or confiscatory taxation, the burden falls disproportionately on the poor. The rich will obtain their supplies of Scotch from regular contacts with links to embassies, smu-gglers and foreign retur-nees. The poor have to depend on illicit hooch as they cannot afford the highly priced imported stuff nor the heavily taxed, local factory distilled brands. We have seen media reports of tr-agedies with hundreds of people taken ill, blinded or dying after consuming bootlegged liquor.

Cigarettes, though not banned, are heavily taxed. Tobacco companies serve as revenue collectors. The better the brand the higher is the tax rate. The burden again falls on the poor. They are forced to smoke cheap cigarettes without filters which are even more injurious to health.

In the US misguided activism and high tax burden on tobacco companies have resulted in an increasing number of people moving to smoking Indian made beedis. What is good for India’s exports is disastrous for America’s youth. Beedis have more chemicals and carry far more heal-th risks for smokers. In Nepal few people can afford quality cigarettes and therefore for most smokers the option is to go for cheaper, killer varieties or buy smuggled products. The results ev-erywhere are the same. Ban a popular activity s-uch as drinking or smo-king and you drive it underground. You do not s-top it. Raise taxes unrea-sonably and the effects are much the same. Sm-uggling and tax evasion become the norm. The a-nswer is to tax cigarette and liquor much the sa-me way as potato chips and chocol-ates which too are harmful.

(The writer can be contacted at: everest@mos.com.np)