Tue. Apr 16th, 2024
Current tax burden on cigarettes in India is far below the standard of international best practice

365telugu.com online news,Hyderabad, December 17,2020: Tobacconomics released the first edition of the International Cigarette Tax Scorecard, assessing the performance of cigarette tax policies in over 170 countries including India. Tobacconomics is based at the University of Illinois at Chicago’s Institute for Health Research and Policy, conducts economic research to inform and shape fiscal policies for health globally.India got an overall score of 1.88 out of 5 possible points, which is slightly better than the South-East Asia average (1.82), but lower than the global average (2.07) and scores of top performing countries (4.63). The top performing countries are Australia and New Zealand, which reflects their high, uniform specific cigarette excise taxes with regular increases that have significantly reduced the affordability of cigarettes.The Tobacconomics Scorecard assesses countries’ cigarette tax policies based on international best practice using data from the World Health Organization from 2014-2018. Nearly half the countries scored less than two out of the five-point maximum. There has been little improvement from 2014-2018: the global average score rose only slightly from 1.85 in 2014 to 2.07 in 2018. The Cigarette Tax Scorecard has been created by the University of Illinois Chicago’s (UIC) Institute for Health Research and Policy.

Current tax burden on cigarettes in India is far below the standard of international best practice
Current tax burden on cigarettes in India is far below the standard of international best practice

India had significantly improved its score on cigarette taxation policy from 1.38 in 2014 to 2.38 in 2016 after which it declined to 1.88 in 2018 due to the lack of tax increases on tobacco and increasing affordability of cigarettes. Overall scores, however, improved in 89 countries. Introduction of significant cigarette excise taxes, simplification of previously complicated tiered cigarette excise tax structure and large tax increases are the reasons why some countries improved their scores, and they are already reaping the rewards of higher revenues and lives saved.The Scorecard shows considerable untapped potential for cigarette tax increases to raise revenue for a COVID-19 recovery and importantly, prevent premature deaths and promote a healthy and productive workforce,” says Tobacconomics director and lead author of the scorecard, Frank J. Chaloupka.

Current tax burden on cigarettes in India is far below the standard of international best practice
Current tax burden on cigarettes in India is far below the standard of international best practice

“The current tax burden on cigarettes in India is 52% and is far below the standard of international best practice. The lack of increase in taxes on tobacco products after the introduction of the GST in the year 2017 has increased the affordability of cigarettes in India. This and the complex tiered cigarette tax structure in India have significantly contributed to a reduced score for India in this scorecard. India must reduce the number of tiers for the purpose of cigarette taxation and significantly increase its existing excise taxes on tobacco products to save lives and raise much needed revenue” according to Dr. Rijo John, a health economist and adjunct professor at the Rajagiri College of Social Sciences, Kochi.“Indian and global studies are providing clear evidence of how tobacco use in all forms, whether smoking or chewing, is leading to severe COVID-19 manifestations and adverse outcomes. Regular tax increases on tobacco products will reduce their consumption and generate much needed revenue to strengthen health promotion and prevention programs. This will also help address the comorbidities of tobacco use and COVID-19 pandemic in India’’ said

Current tax burden on cigarettes in India is far below the standard of international best practice
Current tax burden on cigarettes in India is far below the standard of international best practice

Dr Harit Chaturvedi, Chairman of Max Institute of Cancer Care.

About 3500 people die every day in India from tobacco use and the economic burden from tobacco use amounted to Rs. 177,341 crores in 2017-18 which is 1% of India’s GDP. In addition, the ongoing COVID-19 pandemic has created a major dent in India’s GDP growth. Reforming tobacco taxes provides a quick and easy way for India to raise much needed revenue for economic recovery. Tobacco taxes are the single most effective way to minimize the negative health and economic impacts of tobacco consumption. The best way to do this is through a uniform specific excise tax that comprises at least 75% of the retail price and is automatically updated to stay ahead of inflation and income growth.