From: Moçambique: Increasing economic growth and political stability in the post civil-war era: Useful strategies: Summary of an organizational consultation completed in November 1991© 1992, 1999, 2016 by Stan De Loach, Ph.D., organizational consultant
8. Rational tax and tariff structures
The consumption of cigarettes, beer, and other varieties of alcoholic beverages is directly or indirectly prejudicial to the national economy, the low-income family budget, the public welfare, and the political interests of the government. Higher taxation of these nonessential products makes them less accessible and reduces sales of them. Taxation of these products affects the disposal of discretionary income.
Increased costs to the health care system, resulting from the consumption of tobacco and alcohol products, justify a higher tax rate on these products. Alcohol consumption tends to increase crime and health problems; tobacco use tends to produce health problems and litter. One half of the revenues generated by taxes on these products should be dedicated to providing health care for conditions caused or exacerbated by the consumption of alcohol and tobacco. The remaining half of the revenues could be reserved for use in educational drives to prevent the abuse of these products and addiction to them.
In some degree, a refundable deposit on the containers in which alcohol and tobacco are marketed discourages their use among the poor. Refundable deposits on their packaging reduce the quantity of related litter and consequently the costs of street sanitation.
Schools should disseminate information about the relationship of tobacco and alcohol consumption to impaired health. Until the information is more widespread, the government might mandate the placement of health warnings on cigarette packages and alcohol products. Ultimately, all attempts to manage consumption of these common, detrimental, and addictive products should run parallel to attempts to offer substitutes with fewer and less noxious effects on health and productivity.
Individual and corporate tax rates should be analyzed to ensure that they reflect the policies and plans of the government. They should respond to critical needs of the population. Escalating income taxes are a fair method of exacting funds for the management of government from those with higher incomes. Sales taxes, except on items defined as basic, essential, medical, or educational, are a reasonable form of generating revenue from the entire population.
Corporations must be educated diplomatically to the fact that, in addition to their tax liabilities, they have a social debt to the sources of their income. This debt is particularly significant when their earnings are so large as to be disproportionate to those of other companies and when their marketing base is the entire country. A more profound social debt arises when a significant share of earnings is exported from the country to shareholders and holding corporations located in other countries.
Creativity in exacting the payment of this social debt is useful because large companies and multinational corporations often possess a multiplicity of skills and resources that, in the long term, are more necessary and expedient for the nation's purposes than payments of taxes in cash or credits.
time, tariffs on imports are rational only for those products competing
directly with national products.
Reports on consultations in other