NOTE, India lauds GoI efforts on tobacco taxation: Refutes industry claims on tobacco farmers suffering due to tax increase as “‘misleading”

Prakash Kamat in Panaji,
July 2-National Organisation for Tobacco Eradicarion(NOTE),India has lauded the ongoing efforts of the government of India (GoI)on tobacco taxation and have urged that such efforts need to be augmented to sustain the momentum to continue to achieve revenue and public health goals. Endorsing the government’s decision to include cigarettes and smokeless tobacco in the highest tax slab for its long-lasting impact on the lives of the country's 268 million tobacco users, public health organizations have said that this will provide a solid foundation for reducing tobacco usage among vulnerable populations.
At the same time,these organizations like NOTE,India and doctors have emphasized the need for constant review and increase in tobacco taxation rates to ensure tobacco/products do not become more affordable.
In spite of the positive moves of the government in 2017, present GST rates combined with the compensation cess for all tobacco products is far below the recommended level of tax burden (taxes as a percentage of final tax inclusive of retail price) of 75% by the WHO (World Health Organization).
The total tax burden is currently only about 53% for cigarettes, 22% for bidis and 60% for smokeless tobacco  - this data reveals a far different picture from what the tobacco industry is portraying in their demand for lower taxes.
Mr. Ashim Sanyal ,Chief Operating Officer,Consumer VOICE, New Delhi says:“Contrary to the claims made by the tobacco industry, the overall tax rate on all tobacco products in India is still low very compared to other middle-income countries. This encourages tobacco consumption."
Cancer surgeon and NOTE,India Hon. Secretary Dr Shekhar Salkar says that categorizing cigarettes and smokeless tobacco as demerit goods under GST and levying the highest GST rate of 28% plus cess on these, the GoI has prevented millions of youth from tobacco initiation and lifelong addiction. GST Council must also impose a compensation cess on bidi’s like that on cigarettes and smokeless tobacco as this is widely consumed by weaker section of the society.
Dr. Salkar further says, "Tobacco use imposes enormous health and economic burden on the country.  Each year, over one million Indians die from tobacco-related diseases in India. This is besides the enormous treatment costs which shatters the families. Higher prices will bring down the consumption drastically, adding, "I hope that the government taxes all the tobacco products at a very high rate to ensure it discourages mass consumption.”
Refuting the industry claims that tobacco farmers suffering due to tax increase as being unfounded and highly misleading, these  public health organizations and physicians say that if the industry is genuinely representing farmers’ interests , they should be ready to part with a higher share of their profit margins to farmers instead of exploiting them and increasing its own profits. They further said that it is well known that most tobacco farmers are caught in a vicious cycle to debt by the organized tobacco industry through long term loans with high interest rates.,opines NOTE,India.
Most of the GST compensation cess on cigarettes is specific in nature and  has not been revised for the past two years. This has significantly eroded the real value of tax and has made cigarettes highly affordable, threatening to undermine the progress in reduction of prevalence of smoking. The GST council must also impose a compensation cess on bidis like that on cigarettes and smokeless tobacco, to make a more rationalized tobacco taxation system,says organisation working to curb tobacco consumption.
Tobacco kills more than 1.3 million people each year in India (home to the second greatest number of smokers in the world behind China). Additionally, tens of millions use deadly smokeless tobacco products. "These are harsh realities and there is nothing positive about tobacco consumption. In fact, approximately 130 million people of age 15 and older in India currently smoke and roughly half of all adults are exposed to second-hand smoke at home,"Dr Salkar, who is also associated with Goa Cancer Society and Manipal Hospital, Goa and has been relentlessly working on reduction in tobacco consumption in Goa, particularly the youth, told this blogger on Tuesday. (Eom)