Taxing beedis best way to curb tobacco abuse, says study
By IANSWednesday, April 7, 2010
NEW DELHI - The government should increase taxes on tobacco products, especially hike the price of beedis, from the current Rs.14 per 1,000 to Rs.98, to limit 15.5 million premature deaths due to this most common form of tobacco abuse, a new study has suggested.
The study, Economics of Tobacco and Tobacco Taxation, says that increasing taxes on beedis is the most effective way to reduce tobacco consumption, save lives and earn substantially higher revenues.
It was conducted by a team of public health experts and funded by the Bloomberg Global Initiative to Reduce Tobacco.
“The recommendations include increasing taxes on beedis from Rs.14 to Rs.98 per 1,000 beedis that will increase the government revenue by Rs.36.9 billion while curbing 15.5 million premature deaths due to beedi smoking,” said Prakash C. Gupta, director of Healis-Sekhsaria Institute of Public Health, quoting the research findings.
The report points out that by 2020 tobacco will be responsible for 13 percent of all deaths in India. It estimates that without any intervention, more than 38.4 million beedi smokers and 13.2 million cigarette smokers are likely to die prematurely due to smoking.
The study recommends a five-point strategy to curtail tobacco consumption by increasing taxes on beedis and cigarettes, regulating beedi production and simplifying the current complex tax system.
In one of its recommendations, the report says that eliminating the small producer exemption or limiting it to truly small companies, prohibiting the sale of unbranded beedis and mandated reporting of beedi tobacco sales and purchases will ensure higher tax compliance.
The report also says that increasing taxes on cigarettes to 78 percent of retail price will avert 3.4 million premature tobacco-related deaths, while increasing Rs.146.3 billion in additional revenues each year.
“The recommendations made in the study should be considered while evaluating tobacco taxation in India,” said Gupta.
Beedi smoking is known to increase the risk of oral, lung, stomach and oesophagus cancers, heart diseases, chronic lung disease, asthma and tuberculosis.
India accounts for more than 85 per cent of the world’s beedi production.
