Hike in tobacco tax not enough, should be 75 per cent, believe experts

NEW DELHI, FEB. 4:  The government has levied an additional 16 per cent tax on tobacco, but experts say it should be raised to 75 per cent or more to reduce India’s cancer burden. Finance Minister Nirmala Sitharaman on Wednesday announced the additional 16% on tobacco under the National Calamity Contingent Duty.

“The 16 per cent tax is a misnomer as the overall taxes on cigarettes will increase only by about 1.8 per cent, while its expected impact on the retail price will be just about 1 per cent,” health economist Dr Rijo M John, professor at Rajagiri College of Social Sciences, Kochi, said. “Tobacco industry is painting the wrong picture. They will have an excuse to hike cigarette prices.” Quoting the WHO, which has recommended that countries levy a tax burden of at least 75 per cent, he said, in India, after levying all the taxes, including GST, cess, excise guty and NCCD, the tax comes to just 50-52 per cent.

After the announcement, excise duty on filter cigarettes of length over 70 mm up to 75 mm will go up to Rs 630 from Rs 545 per 1,000 sticks; on filter cigarettes of length over 65 mm up to 70 mm it will go up to Rs 510 from Rs 440 earlier, while for filter cigarettes up to 65 mm, it will go up from Rs 440 to Rs 510 per 1,000 sticks.Saying that there had been no tax revision on tobacco in India for five years, Rijo said that 44 countries have levied 75 per cent tax on tobacco, including Sri Lanka, where it was increased to 77.02 per cent by 2020.

Stubbing it out: Is it possible?

270 million tobacco users above 15 years of age: 38 million use cigarettes, 72 million use bidis, and the rest of the 200 million use smokeless tobacco. 44 countries have levied high taxes on tobacco.

As per WHO, in 2020, only 13% of the world’s population living in 40 countries were protected by tax rates at 75% or more of the price of the most popular brand of cigarettes

Over 80 per cent of the world’s 1.3 billion tobacco users live in low- and middle-income countries.

One in nine Indians is likely to have cancer in a lifetime as the disease may jump by 12.8 per cent from 2020 to 2025: ICMR

All cancer cases are expected to increase by 27.7% from 2015 to 202.

-TNIE