Meaning of Sin Goods, Sin Tax

Term Sin Goods, Sin Tax under Indian Tax

 

The details about Sin Goods, Sin Tax are explained here.

Sin Goods:

Sin goods are goods which consider harmful to society.

Example of sin goods: Alcohol and Tobacco, Candies, Drugs, Soft drinks, Fast foods, Coffee, Sugar, Gambling and Pornography.

Sin Tax

Taxes levied by the government on sin goods called Sin Tax.

A sin tax is an excise (now GST) tax specifically levied on certain goods deemed harmful to society, for example alcohol and tobacco, candies, drugs, soft drinks, fast foods, coffee, sugar, gambling and pornography. Two claimed purposes are usually used to argue for such taxes. In contrast to Pigovian taxes, which are to pay for the damage to society caused by these goods, sin taxes are used to increase the price in an effort to reduce their use, or failing that, to increase and find new sources of revenue. Increasing a sin tax is often more popular than increasing other taxes. However, these taxes have often been criticized for burdening the poor, taxing the physically and mentally dependent, and being part of a nanny state.

Sin tax is used for taxes on activities that are considered socially undesirable. In many cases, sumptuary taxes are implemented to mitigate use of alcohol and tobacco, gambling, and vehicles emitting excessive pollutants. Sumptuary tax on sugar and soft drinks has also been suggested; see soda tax. Some jurisdictions have also levied taxes on recreational drugs such as marijuana.

Revenue generated by sin taxes supports many projects imperative in accomplishing social and economic goals. American cities and counties have utilized funds from sin taxes to expand infrastructure.  while in Sweden the tax for gambling is used for helping people with gambling problems. Acceptance of sumptuary taxes may be greater than income tax or sales tax.

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