NEW DELHI: This Budget is likely to make tobacco products even more costlier with health ministry proposing hike in tax on cigarettes
by Rs 3.5 per stick. Unlike the previous years, the taxes are likely to be applicable to all lengths of cigarettes.
In a bid to check the use of tobacco and its products, Union health minister Harsh Vardhan
has written to finance minister Arun Jaitley that the previous 19% increase in tax on cigarettes by the UPA government in February 2013 was "too small" to significantly reduce the consumption.
Currently, there is no uniform slab for taxation of cigarettes and rates are fixed depending on size and percentage of tobacco used, said an activist. Heath ministry data shows smoking of cigarettes and bidis causes about one million deaths a year in India. A recent report by the Public Health Foundation of India (PHFI) highlighted how tobacco use puts enormous economic burden on the nation. READ ALSO: 'Tripling of tobacco taxes may prevent 200m deaths'
The report, supported by World Health Organization (WHO), estimated that India spent Rs 1,04,500 crores in 2011 to deal with tobacco-related diseases. This figure is 12% more than the combined state and central government expenditure on healthcare in the same year.
Vardhan, in his letter, also stressed on the urgent need to regulate the bidi industry.
Apart from removal of tax exemption extended to bidi makers, he also suggested redefining taxation points in the bidi tax policy to ensure collection of revenue and prevent tax evasion in the long run.
The ministry also indicated that it will submit separate proposals on actions required at the state level %such as additional VAT on tobacco products and creating greater awareness against smoking.