Demand to increase health tax on tobacco
Raipur. Public health groups along with doctors and economists have appealed to the government to increase excise duty on all tobacco products in the Union Budget 2024-25 to generate additional revenue. In their appeal to the Finance Ministry, they have urged to increase the health tax on cigarettes, beedis and smokeless tobacco. Excise is a health tax that is imposed on products such as tobacco that have a clear negative impact on public health.
According to these experts, among the many public policy tools to regulate tobacco consumption, increasing excise taxes is considered the most cost-effective. It is based on a large body of research conducted around the world. Health tax is also known as sin tax. It is often used in many countries to achieve this.
According to a recent study, products like cigarettes, beedis and smokeless tobacco have become cheaper continuously in the last 10 years. Recently, there has been a slight increase in NCCD on cigarettes, but apart from that there has been no major increase in tobacco taxes since the introduction of GST in July 2017.
The total tax burden (tax as a percentage of retail price including final tax) combining the current GST rate, compensation cess, NCCD and Central Excise is only 49.3% for cigarettes, 22% for beedis and 63% for smokeless tobacco. Is. The World Health Organization recommends a tax burden of at least 75% of the retail price on all tobacco products. But the current tax burden on all tobacco products is much less than this.
Dr Rijo John, health economist and assistant professor at Rajagiri College of Social Sciences, Kochi, said, “In view of the fact that it has been more than six years since GST was implemented and there has been no major tax increase on tobacco products in this period, It is important for the Central Government to consider increasing taxes on tobacco beyond a nominal increase in the National Disaster Contingent Duty (NCCD) which is less than 10% of the total taxes levied on tobacco. When the government avoids raising taxes on tobacco, tobacco companies are free to raise prices, increasing their profits. As a result, the increased revenue that the government could have collected is diverted towards industry profits.
