Tobacco: Unrealistic Taxation nurturing the Black Market

The best way for a politician to make you pay, is to shame you first.

I am not going to dwell on the harms of smoking for that I firmly believe of human maturity, and above all, freedom. [for the record, I’ve never smoked a cigarette in my life]

One can argue that Lottery should be taxed; after all, I’ve seen people –through working in multiple stores, spending huge sums of money on lottery with a return, less than 12%! Isn’t that harming people?? Hush, lottery is government monopoly… selling dreams is government business after all, and people are mature enough ‘obviously’ to make that decision.

To understand how it worked for both, governments and big tobacco companies, we must look at each group separately:

  1. Tobacco Industry: with many players in the market, the taxation, along with other limitations has forced most of the small operators to sell-out, allowing the big ones to grow even bigger and the small ones to vanish! The outcome was the world-market with 3-5 major players.
  2. Governments: by playing the mind game, governments actually convinced their people that smoking is slowly and steadily killing them, their loved ones and even their unborn yet, allowing them to commit this act of murder for a fee (tax)!

Bottom-line: the end user is an end loser; for tobacco companies’ are still selling their products –demand, no doubt increasing every year [note the lack of statistics when it comes to measuring the actual increasing number of smokers despite all policies]. Governments have subdued their people to pay whatever they’re told to pay in return for “killing themselves”!!

What about the Black Market then? No better example to understanding black market’s volume and the absurd taxation like the one observed on Shisha (Hookah) flavored tobacco, known as Mu’assel.

To elaborate…

Product: Mu’assel.

Description: a syrupy tobacco mixture (usually honey or molasses) smoked in a Hookah/ Shisha. Typical flavors of Mu‘assel include apple, grape, menthol, lemon, chocolate, melon and watermelon. More traditional blends are unflavored such as Saloum and Zaghloul. Some brands of Mu’assel are tobacco-free, using other leafy foliage instead but they are not that pleasant to smoke.

MajorBrands– North America:

  1. Nakhla; Egyptian make. Two distributors in the USA and Three in Canada.
  2. Al Fakher; United Arab Emirates make. No known distributors in North America.

Nakhla Mu’assel is 40% cheaper than Al Fakher; however, Al Fakher is more desired in North America for its extra-sweet taste.

In Canada, with the tax on tobacco is one of the highest in the world; consumers and suppliers have found a common ground in the black market, supplying
Mu’assel for double the price it sells in the USA ((legally)) yet, saving their customers almost 35% of the price they would pay if buying taxed Mu’assel when/if to be found
!

Taxation is not the only cash-cow; penalties and fines, set at unimaginable figures –bankrupting small shops at times, are turning the market into a rather hostile place were either you embrace black-market or pay an absurd tax to kill yourself- if that was the case.

Radicalism is the outcome of oppression; just like, black-market is the result of absurd taxation.

Thus, I think🙂

Firas

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