Yes, it will. Politicians always seem to ignore the real consequences of their actions. So they say to themselves...

"X gallons of some product are sold on the island every year. If we add a tax of 10 percent to that then we will take in 0.1 * X in additional revenues. Great!"

They completely ignore the fact that the additional tax will cause some people to change their behavior, and that as a result they are almost certain to increase their revenues by LESS than 0.1 * X. In fact, it is entirely possible that their 10% tax (just a number picked out of the air as an example) might be the straw that broke the camel's back and might, therefore, be enough to reduce sales by MORE than 10%, resulting in an actual REDUCTION in their total revenues!

Try to explain that to a politician or a bureaucrat, though, and you will get nothing but a blank stare 90% of the time.