Marijuana Could be the Answer UK Fiscal Problem?
September 16, 2013 Taxation in UK
LONDON – The legalization of marijuana could potential to help the UK narrow the national budget deficit and to significantly reduce public spending.
On September 15th the UK Institute of Social and Economic Research released a new report on the potential social benefit of legalizing and regulating the sale of marijuana in the UK and Wales, and forecasting the extent of future tax revenues and costs arising from the move.
The ISER estimates that the overall increase in tax revenues collected from “licensed cannabis supply” would be between GBP 0.4 billion and 0.9 billion per year.
Legalizing the sale marijuana would also lead to a reduction in public spending by the government of up to GBP 460 million, as the change may lead to a reduction in the costs for policing, criminal justice and drug treatment.
Overall, introduction of the controlled sale of marijuana may improve the government’s fiscal position by up to GBP 1.36 billion per year.
Despite the initial positive results shown in the study, the lead researcher of the Institute Stephen Pudney recommended that further investigation be conducted on the economic impacts of legalization, as there are shortcoming in the currently available information on the public costs associated with the drug, and, subsequently, the overall spending reductions which might stem from changes to the legality of drugs.
Photo by why_spyder