Why does the government tax tobacco and alcohol?

Answer 1

Cigarette and alcohol are considered as demerit goods. Government would want to reduce consumption of such goods which they deem as socially undesirable.


You can use price elasticity of demand to explain why higher taxes has to be imposed to ensure that the policy is effective.

Answer 2

It is a good source of revenue, and the prevailing opinion is that the people who smoke and drink should be responsible for paying (at least partially) the costs that their use imposes on society.

Tobacco and Alcohol are poisonous things which is not needed for the survival of a human being. But rice and wheat is essential commodities. Human beings cannot survive with out these essential commodities our country alcohol is a prohibited substance ,but it is consuming at the same rate's as this peoples are not allowed to use tobacco at the public places.This proves that Government is not able to abolish tobacco and alcohol from the country's by leaving more tax they thought that the consumption can be reduced the same time if the consumption is not reduced the Government can develop the economy using this extra tax collected.

All taxes have one purpose, and sometimes two.

The primary purpose of a tax is to raise revenue, and the secondary is to attempt to restrict the sale of, or access to, something by making it more expensive.

Taxes on alcohol and tobacco are revenue raising, and prohibitive.

Answer 3

So the government can go in to debt slower than if they did not.

Answer 4

to raise money for the gov't

Answer 5

to finance it expenditure