‘Sin’ taxes up

'Sin' taxes up

Smokers to cough up more, while beer and spirits drinkers forced to pay up

Mike King

Mike King is a Fool.com.au Investment Analyst and Writer. He caught the investing bug more than a decade ago, at a time when the U.S. had invaded Iraq and fear reigned in the markets. His initial success as the markets took off encouraged his passion and thirst for knowledge. With 13 years behind him at one of Australia's largest domestic banks, Mike's passion for stocks led him to join a boutique funds management firm, where he stayed for four years. A seven-year stint in equity research at one of the largest investment banks in the world followed that, giving Mike a thirst to pursue his passion further. Mike holds a Diploma in Applied Finance and Investment and a Graduate Certificate in Financial Planning. His passion is to help retail investors invest better, and that passion was one of his primary reasons for joining The Motley Fool Australia in late 2011. Mike has written thousands of articles since joining, including for Fairfax Media, Yahoo!7, Ninemsn and has also appeared on ABC's The Business. You can see all of Mikes' holdings here

Published February 1, 2013 11:06 am AEDT

Smokers will pay more than $10 a pack, and drinkers more than $20 for a bottle of 700ml spirits from today, as part of an automatic tax increase introduced more than 30 years ago.

Beer drinkers aren't exempt either, paying more than $15 in taxes on a carton of full-strength 375ml cans. If you buy a slab of pre-mixed spirit cans, you'll be handing over more than $34 to the government.

The changes are part of an automatic rise in indexation setup 30 years ago by then prime minister, Bob Hawke, and is expected to pour millions into the shaky federal government budget. The tax is indexed to the Consumer Price Index (CPI) and adjusted twice a year.

Retailers, shopkeepers and bar staff will be forced to collect the extra tax, but other factors such as competition, profit margins and business expenses could mean that consumers may pay more or less than the tax rise and can vary between brands.

Wine drinkers can rejoice for now, as taxes on wine are not affected by the changes to the so-called 'sin' excise.

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