VHAI demands tax hike on tobacco products

VHAI demands tax hike on tobacco products

Srinagar, May 27: Demanding an immediate increase in tax on tobacco and other tobacco products, Voluntary Health Association of India, (VHAI) Friday said that the an increase in taxes will reduce overall tobacco consumption in the state and raise revenues for the State government.

“An increase of 10% in tax makes about 3% of cigarette smokers and 9% of bidi smokers quit smoking. It also has a ‘reining in’ effect by curtailing new entrants into the vicious circle of tobacco consumption and thus helps save lives,” a statement issued by the organization said.

“If the number of tobacco-users is reduced, there will be less expenditure by the government on tobacco related diseases. One rupee spent on tobacco products means Rs. 16 spent on diseases that crop up from using this dreaded menace,” the statement added.

Pertinently, Jammu and Kashmir is fast emerging as the smoking capital of north India. In the state of J&K, the prevalence of tobacco use is quite high. As per the Global Adult Tobacco Survey (GATS) India Survey (2009-10), the overall prevalence of tobacco use in J&K is 26.6 %, with 41.6% of male’s and10.3% females consuming tobacco in one form or the other.

“Taxes on tobacco products in India fall well below the rate recommended by the World Health Organization, (WHO). Tobacco taxes in India are not regularly adjusted for inflation, and over time tobacco products are becoming increasingly affordable, leading to 1 million deaths annually in India due to tobacco related diseases. Increasing tax means a win-win situation for the state–It increases revenues, reduces consumption and save lives and also reduces state’s burden of treatment costs,” the statement said.

“The state Government has shown great leadership in the last two years by raising the tax on tobacco products from 13.5% to 40%. This has had a direct impact on the consumption level of tobacco use, especially among the youth. This also makes J&K as the best practice state on tax increase on Tobacco products,” it added.
Importantly, the Jammu and Kashmir Government raised taxes to 40% on cigarette and smokeless form of tobacco products in year 2013-14. However, the World Health Organization suggests that the taxes on tobacco products should be 65% to 80% of the total retail price.

“Government of Jammu & Kashmir should increase taxes across on all tobacco products from 40% to 65% in the upcoming budget of 2016 -17 and make the state as the best practice example of consistent tax increase on tobacco products in the country. This will lead to increased revenues and will save lives especially of the youth,” the statement added.

The statement also criticized the tobacco Industry for spreading false information about tax hike.

“Tobacco companies often highlight the issue of illicit trade if taxes are increased. This is a myth perpetuated by the industry as there is no credible evidence to support the claim that tax increase will cause an increase in illicit trade. It is also known that companies manufacturing tobacco products often themselves indulge in illegal trade to evade taxes. The only way to combat illegal trade in tobacco products is by enforcing custom controls, strengthening tax administration/monitoring and use of anti-counterfeiting and traceability technology,” the statement added.

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