Caption: Minister of Finance Davendranath Tancoo. Photo: T&T Parliament

By Prior Beharry

FINANCE Minister Davendranath Tancoo on Friday laid five resolutions in the House of Representatives to double excise and CARICOM import duty rates on a wide range of alcoholic beverages and tobacco products.

He said the the increases were a “sin tax” measure that supports public health, protects revenue and remains compliant with regional and global trade rules.

The measures—formalised through a series of Legal Notices issued on October 13 and 17—lift local excise duties by 100% on products including beer, stout, sparkling wine, spirits and multiple tobacco categories, and align CARICOM import duty rates at the same higher levels. Tancoo had announces in the Budget.

Separate orders also raise customs duties on non-CARICOM (foreign) alcohols and tobacco, and increase the standalone tobacco tax.

“These Resolutions seek to increase local and CARICOM rates of excise and customs duty by 100% on various alcoholic beverages and tobacco products,” Tancoo said, adding that the changes were enacted via:

• Legal Notice 373 of 2025: Excise Duty (Tobacco Products) (Amendment) Order
• Legal Notice 376 of 2025: Excise Duty (Alcoholic Beverages) (Amendment) Order
• Legal Notice 382 of 2025: Excise Duty (Tobacco Products) (Amendment) (No. 2) Order
• Legal Notice 384 of 2025: Excise Duty (Alcoholic Beverages) (Amendment) (No. 2) Order
• Legal Notice 385 of 2025: Customs (Import Duty) (Caribbean Common Market) (Amendment) Order

He noted that duties on extra-regional imports were raised under Legal Notice 386 of 2025—the CET (Common External Tariff) amendment—while the specific tobacco tax increase came via Legal Notice 383 of 2025 (Miscellaneous Taxes—Tobacco Tax) Order.

Tancoo explained that excise duty applies to goods manufactured in Trinidad and Tobago, while customs duties apply to imports.

Within CARICOM, most goods move duty-free, but alcoholic beverages and tobacco are exceptions and are taxed at the same rates whether produced locally or in another CARICOM state—“a principle that promotes free movement,” Tancoo said.

He pushed back at opposition claims in the Senate that the orders breach trade agreements, calling them “wild and reckless” and “completely inaccurate.”

He said the measures are consistent with T&T’s obligations under CARICOM arrangements, the CET and the World Trade Organization.

What changes and by how much

On the excise side (local production), rates last moved in 2016 for alcohol and in 2016 and 2020 for tobacco. The new schedule doubles those charges:

• Cigarettes: from $5.26 to $10.52 per pack of 20
• Cigars/cheroots/cigarillos: $36.19/kg to $72.38/kg
• Shisha/other tobacco: $68.70/kg to $137.40/kg
• Beer and stout: $5.14 to $10.28 per litre at 1050° original gravity (pro rata by gravity/quantity)
• Malt beverages: $0.26 to $0.52 per litre at 1050°
• Sparkling wine: $35.20 to $70.40 per litre
• Spirits (brandy, whisky, rum, gin, vodka, liqueurs): from $168.10 to $336.20 per litre of alcohol by volume (proportional for strength/quantity)

On customs duties (imports), tobacco duties on extra-regional goods rise from 78.84% to 95%. Alcohol duty levels for extra-regional imports—unchanged for years until CET adjustments in January 2025—are now doubled again in specific per-litre terms:

• Beer: $10.54 to $21.08 per litre
• Stout: $13.19 to $26.38 per litre
• Sparkling wine: $105.46 to $210.92 per litre
• Spirits (brandy, whisky, rum, gin, vodka, liqueurs): $92.28 to $184.56 per litre
• Malt beverages remain at 20% (no change), with the Ministry saying there is no evidence the existing rate fails to provide sufficient protection.

Why now

Tancoo argued that alcohol excise rates had been static for nearly a decade and tobacco duties unchanged for five years, undermining policy goals and revenue buoyancy amid inflation and health-system costs.

He said the global evidence base supports higher taxes on harmful products to reduce consumption, especially among youth, and to offset public health burdens.

The minister presented the move as a comprehensive “sin tax” package, paired with trade-compliant customs measures to prevent substitution via imports.

He said, “When I first announced this measure during my Budget Statement on October 13, 2025, it was presented to the nation as part of this Government’s revenue generating measure. In fact, in economics the measure is often referred to as the ‘sin tax’.

“Mister Speaker, to elucidate the point further, permit me to quote from the “father of economics”, Adam Smith in his seminal work “An Inquiry into the Nature and Causes of the Wealth of Nations”, and I quote: Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.’

“However, that is not to say the measure will not have many other positive consequences besides revenue generation. Increased costs, as a result of taxation, may lead, in some instances, to less consumption and promote healthier living.”

CARICOM Rates

Comparable CARICOM rates, he said, are often higher. He cited, among others:

• Barbados: BD$100/kg excise on cigars; BD$1.18 per five cigarettes
• St Lucia: EC$356 per 1,000 cigarettes excise; 100% customs on beer and stout from third states
• Belize: 100% customs duty on beer and stout
• Jamaica: 40% customs duty on beer (≤6% ABV) and rum

Tancoo said CARICOM-produced alcohol and tobacco entering T&T will face the same excise-equivalent rate as local products, maintaining national treatment and avoiding distortions within the Single Market.

Extra-regional duty changes were made through the CET framework, which he said aligns with WTO rules.