Friday, February 19, 2021

Is South Africa incorrigible?


The 'nice' word for someone (or government) that never learns from their mistakes is “incorrigible” which is defined as a person (or government) that is not able to be corrected, improved or reformed.

The sales bans may also have had a more limited effect on consumption than was expected. Though the sale of legal, tax-paid tobacco came to a halt, there is evidence that many smokers purchased illicit, tax-evading alternatives on a large scale. A recent study by the University of Cape Town found that more than nine out of 10 smokers continued to purchase cigarettes despite the sales ban.

The tobacco ban appears to have strengthened the illicit trade in cigarettes, possibly permanently. With no tobacco products available via legal means many consumers — even those who would not normally contemplate purchasing illegal goods — bought illicit cigarettes during the ban. The consequence has been increased “normalisation” of tax-evading brands, even to higher-income consumers.

I would add that this is an example of the "hidden cost fallacy," making a decision without considering all the costs and benefits of the decision.  

1 comment:

  1. I wonder what the longer term effects of this on the South African wine industry are going to be.