SMOKERS and consumers of alcoholic beverages have again been hit with increased taxes as government seeks to raise an additional $772 million for the 2010/11 fiscal year.

The increases take effect today.

Finance Minister Audley Shaw, who unveiled the new measures in Parliament yesterday, said the increased taxes will "assist the government in meeting its revenue targets for the 2010/2011 fiscal year".

Shaw said a single specific Special Consumption Tax (SCT) of $960 per litre of pure alcohol will be applied to beers and stouts, wines (including beverages commonly known as tonic wines), cordials, liqueurs, vodka, whiskey, brandy, gin, underproof and overproof rum, except white overproof rum.

The finance minister told the House that studies have shown that the ad valorem and SCT charged on alcoholic beverages severely distorts competition within the local alcoholic beverage sector, frustrates responsible drinking efforts and unfairly penalises the beverages that have the lowest alcohol content.

The administration, in its 2009/2010 budget, increased the SCT on underproof distilled spirits. However, the SCT on overproof spirits and wines, cordials and liqueurs remained unchanged.

In the meantime, Shaw said a special regime would be put in place to maintain the existing SCT rate of US$0.40 per litre on wines, cordials and liqueurs imported directly or taken out of bond by hotels or resort cottages registered with the Jamaica Tourist Board. He said white overproof rum will attract a $450 SCT per litre of pure alcohol. This measure, he said, is expected to yield $618 million.

And an additional $54 million will be culled from an increase in the Additional Stamp Duty (ASD) on brandy, whiskey, gin and vodka. The finance minister said these will attract a single ad valorem rate of 35 per cent.

Meantime, $100 million will come from what Shaw yesterday described as a reform of the tax structure on tobacco products. According to the finance minister, a 2008/09 reform of that structure had only applied to cigarettes containing tobacco and cigarettes containing tobacco substitutes. Cigars, cigarillos and cheroots were not affected, he said, creating a loophole in the law where cigarettes were being imported under the guise of cigars, cigarillos and cheroots, among other things.

He said the uniformed tax treatment for the products would plug the loophole.

"Cigars, cheroots and cigarillos of tobacco and tobacco substitutes will now attract the same tax treatment as cigarettes," Shaw said.