Public health groups, along with doctors and economists, have urged the government to increase excise duties on all tobacco products in the Union Budget 2024-25 to generate additional revenue. In their appeals to the Ministry of Finance, they asked for an increase in health taxes on cigarettes, bidis and smokeless tobacco.
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Health taxes are excise duties levied on products such as tobacco that have a clear negative impact on public health. According to these experts, increasing excise taxes, one of several public policy instruments to regulate tobacco consumption, is considered one of the most cost-effective, based on a significant amount of research from around the world.
Health taxes, also known as sin taxes, are commonly used by many countries to achieve this. According to a recent study, cigarettes, bidis and smokeless tobacco have become increasingly affordable over the past decade.
Recently, there has been a small increase in National Calamity Contingent Duties (NCCD) on cigarettes, but apart from that, there has not been a major increase in tobacco taxes since the introduction of GST in July 2017, says Dr Rijo John, health economist. and Adjunct Professor, Rajagiri College of Social Sciences, Kochi.
If we add the current GST rate, compensation tax, NCCD and central excise duty, the total tax burden (taxes as a percentage of final tax including retail price) is only about 49.3 percent for cigarettes, 22 percent for bidis and 63 percent for cigarettes. smokeless tobacco, he said.
The WHO recommends a tax burden of at least 75 percent of the retail price for all tobacco products. The existing tax burden on all tobacco products is much lower than this.
“Considering that more than six years have passed since the implementation of the GST, and there has been no substantial increase in taxes on tobacco products during this period, it is critical for the Union government to consider reducing taxes on tobacco beyond small increases in the NCCD, which represent less than 10 percent of total tobacco taxes.
“If the government refrains from raising taxes on tobacco, tobacco companies will independently raise prices, increasing their profits. Consequently, the higher revenues that the government could have collected are being diverted to the profits of the industry,” said Dr. John.
According to the experts, increasing excise duties on all tobacco products can be a very effective policy measure to address the immediate need to increase central government revenues. It will be a winning proposition to raise revenue and reduce tobacco use and related diseases.
“Tobacco use, a slow-moving pandemic, claims the lives of 13 lakh Indians every year. It is more crucial than ever to keep tobacco products out of the hands of vulnerable populations such as the youth and the underprivileged sections of society. Nearly 50 percent of all cancer cases in India are due to tobacco. It is in the interest of both users and the country to increase taxes on all tobacco products. This will reduce its affordability and consumption,” said Dr Pankaj Chaturvedi, head and neck cancer surgeon at Tata Memorial Hospital.
The Standing Committee on Health of Parliament recently submitted a pertinent and comprehensive report on Cancer Care Plan and Management in which it made a detailed study of the causes of cancer in India and noted with concern that India “has the highest number of lives lost is due to oral cancer caused by tobacco, followed by cancer of the lungs, esophagus and stomach.”
It also noted that tobacco use is one of the most prominent risk factors associated with cancer. In light of these alarming observations, the committee noted that India has one of the lowest prices for tobacco products and there is a need to increase taxes on tobacco products. The Committee recommended that the government increase taxes on tobacco and use the additional revenue for cancer prevention and awareness.
India has the second largest number (268 million) of tobacco users in the world and of these, 13 lakhs die every year from tobacco-related diseases, experts say.
Nearly 27 percent of all cancer cases in India are due to tobacco.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)