Independent Senator Francis Lewis has raised concerns over the projected $1 billion in revenue from increased excise duties on rum, beer, and tobacco products, as outlined by Finance Minister Davendranath Tancoo. Speaking during a Senate debate on October 29, Lewis challenged the assumption that consumption of these products would remain unaffected by price changes, a concept known as price inelasticity. He cited a historical example from the ‘beer wars,’ where a 33% price drop led to a 45% surge in sales, arguing that the market is more elastic than policymakers assume. Lewis, who has consulted for local alcohol manufacturers, warned against rapid tax hikes, emphasizing the potential harm to businesses still recovering from the COVID-19 pandemic. He highlighted the sector’s significance, noting it employs approximately 100,000 people, with small bars and rum shops heavily reliant on alcohol sales. Lewis also expressed concerns about the lack of consultation with industry stakeholders, suggesting that sudden tax increases could create uncertainty and hurt revenue. Despite his objections, the Senate approved the government’s proposals to raise excise rates on alcohol and tobacco products.
Senator: Alcohol, beverage sectors pivotal to Trinidad and Tobago
