DILI, 2 november 2021 (TATOLI) – The government will increase the excise duties on alcohol and tobacco products in 2022 to boost State’s revenue, said Prime Minister, Taur Matan Ruak.
Presenting his 2022 Budget Speech on Wednesday (1/12), Ruak said that the government therefore moving forward in introducing an “inhibitor” excise tax, which will not only increase domestic revenue but will also benefit the health of Timorese people, especially the younger generation, by increasing the price of tobacco and alcohol.
He said this increase is intended to help raise domestic revenue, as well as discourage consumption of high alcoholic beverages, which cause harmful effects on consumers’ health, by increasing the tax rate on beers with less than 4.5 percent alcohol content and the tax rate on beverages with a higher alcoholic volume.
“With this increase, we want to continue to promote the domestic beverage production industry, which creates dozens of direct jobs and hundreds of indirect jobs, while preventing the domestic market from being flooded with low-priced imports that contribute nothing to the national economy,” Ruak said during his presentation of the 2022 General State Budget at the National Parliament on wednesday.
Thus, the excise tax rate applicable to malt beer with an alcohol content of less than 4.5 percent is increased from US$2.50 to US$2.70 per liter, and the excise tax rate applicable to malt beer with other alcohol content, as well as wine, vermouth, and other fermented beverages, is increased from US$3.50 to US$4.50 per liter.
Ruak said Timor-Leste is noted by international organizations as one of the countries with the highest percentage of youth smokers. Over the past decades, several countries have successfully used tax increases to reduce tobacco consumption.
“Therefore, in order to discourage the consumption of tobacco, a highly unhealthy product, it is planned to increase the excise tax rate applicable to tobacco from the current US$19 per kilogram to US$25 per kilogram, an increase that the National Parliament suggested to the Government last year,” said Ruak.
He emphasized that these increases will be taken into account in the reform of the tax legislation, and the government should use the tax rates to promote the adoption of healthy behavior by the population.
Journalist: Antónia Gusmão
Editor: Julia Chatarina
Translation: Filomeno Martins
Editor: Nelia Borges Rosario
