Offer An Article

Pandemic Latest News

Tobacco prices: Experts demand action

Bidis. Tobacco prices concept.
Experts are calling for tobacco products such as bidis (pictured) to be taxed more heavily in India in response to the country’s considerable burden of tobacco use.

Tobacco is among the leading threats to public health in India. Between 1998 and 2015, the number of smokers in India increased from 79 million to 108 million. At present, fourteen percent of adults use smoking tobacco. 25.9 percent of adults use smokeless tobacco. Although fewer Indians are using tobacco today than at the start of the decade, more than 900,000 Indians lose their lives to the habit each year and the annual cost to the exchequer numbers at more Rs 1.04 trillion. As such, tobacco prices are in the crosshairs of a broad spectrum of experts, calling on officials to make the habit less affordable and so further bring down the number of tobacco users in the country.

As previously reported by Health Issues India, “it has been suggested in the past that pressure from the tobacco lobby has made the government reluctant to push for reform in areas such as taxation.” Health economist Rijo John explains that “the total effective tax burden currently for tobacco products in India is only about 49 percent for cigarettes, 22 percent for bidis and sixty percent for smokeless tobacco. This data reveals a far different picture from what the tobacco industry is portraying in their demand for lower taxes. As the taxes have not been increased on any of the tobacco products for more than two years, all tobacco products have become more affordable during this time. Hence, increasing taxes on tobacco products are warranted not only for regulating its consumption, but also for raising more tax revenue.”

Bidis, in particular, warrant extra scrutiny according to Dr Harit Chaturvedi, chairman of the Max Institute of Cancer Care. “Government should levy uniform and high taxes on all categories of cigarettes, bidis and smokeless tobacco,” he opined. “It should levy cess on bidis just as it does on other tobacco products. There is ample evidence about bidis being the killer and not the pleasure of the poor. It should be made unaffordable for the poor to save them from a lifetime of misery and suffering.” 

Bidis are often referred to as “the poor man’s cigarette” in India and account for the majority of tobacco use in India (around 72 percent). A popular misconception is that they are safer than conventional cigarettes. In fact, as bidis do not contain the amount of chemicals added to cigarettes in order to aid combustion. the smoker must inhale harder and more frequently. This leads to the toxic chemicals being absorbed into the lungs at a higher rate. As such, the costs of diseases linked to bidis far outweigh what they bring into the country in tax revenue – and, according to analysts, heightens the need for increased tobacco prices to offset the cost to the treasury.

A woman smokes at the Kinari Bazaar in Agra, Uttar Pradesh. Raising the cost of smoking by upping tobacco prices has been advocated by experts to encourage people to kick the habit.

The renewed calls have been issued ahead of a meeting of the Goods and Services Tax (GST) Council on December 18th. GST has been controversial ever since its rollout, with its ramifications for healthcare a particular point of contention – especially within the public health community. Public health groups have appealed to GST Council officials before. John, last year, commented that “cigarettes have become much more affordable compared to the time GST was implemented and it warrants significant upward revision of cess rates applied on cigarettes.” In the year since, little has ostensibly changed.

As reported in The News Minute, “as opposed to the current GST slabs of five percent, twelve percent, eighteen percent, and 28 percent, the rates could be increased and slabs reduced to three – eight percent, eighteen percent and 28 percent…the government may also bring certain healthcare services under the GST net, as it looks to give a leg up to revenue mobilisation that has been hit hard in the ongoing economic slowdown.” 

When it comes to tobacco prices, scrutiny is being applied with GST officials being urged to continue applying the 28 percent cess on them as well as a compensation cess of Rs 5,463 for every thousand sticks. “Such [an] increase could potentially increase the GST revenue from cigarettes by about Rs 150 billion while targeting a ten percent reduction in consumption,” read a proposal by public health organisations. “Compensation cess on all smokeless tobacco products should also be increased to 125 percent, on average, from the current 104 percent. This could potentially increase the GST revenue by about Rs 3 billion while targeting a ten percent reduction in consumption.” 

“It is critical that tobacco products are retained in the 28 percent slab and compensation cess is increased on all of them,” commented Bhavna B. Mukhopadhyay, chief executive of the Voluntary Health Association of India. “Increase in tobacco taxation will be beneficial for our country’s economy as well as to address public health concerns related to tobacco thus making it a win-win situation.”

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: