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Hospitals, bidi workers and public health organizations welcome's GST Council decision to tax all tobacco products including bidis at 28% saving millions of lives

Posted On: 2017-06-07 19:46:51

Public Health fraternity along with doctors and bidi workers from across the country, welcomed GST Council's landmark decision to categorize all tobacco products including bidis as demerit goods, taxing them at the highest tax rate at 28% under GST. This is one of the most critical public health decisions taken by the Indian Government that will have a long lasting impact on the lives of India's 275 million tobacco users. Taxing bidis, cigarettes and chewing tobacco products at the highest GST rate will not only discourage the consumption of tobacco products but will also increase revenue collections for the government.

"Categorizing all tobacco products at the highest GST rate, including bidis, is one of the boldest and most impactful public health decisions that Indian Government has taken to protect the health of its citizens from the growing menace of tobacco addiction. Taxing bidis at 28% will prevent death and disease not only amongst millions of bidi users, but also amongst bidi workers who are mostly women and children," says Dr Ajai Kumar, Chairman HealthCare Global and President of Private Hospitals - Karnataka Chapter.

All major countries in the world subject tobacco products to high rates of taxes with the objective of discouraging their use among the poor & youth and also to garner additional revenue. For tobacco taxation to work as a deterrent against tobacco consumption, the tax regime needs to be uniform across all tobacco products. By taxing bidi at the same rate as cigarettes and chewing tobacco, the government has assured that millions of bidi users will quit and millions of youth will be prevented from initiating tobacco usage. Global experience around the world has shown that while tax increase will decrease use, government revenue will still increase.

"The government's bold decision to tax bidis at the highest level gives us courage and confidence that the real voice of bidi workers has been heard and that the government is serious in addressing the enormous health harms that are faced not only by workers but also users," said Tamil Nadu's Thangam (45, who has been rolling bidis since she was 10 years old. "On behalf of all bidi workers, I thank the government and are grateful that it did not hear the voices of the bidi company owners who have been using us as a shield to evade higher taxes," she added.

Bidis are the most commonly used tobacco product in India, accounting for 64% of all tobacco consumption and are disproportionately consumed by the poor. Bidis contribute to the majority of the 10 lakh deaths attributable to tobacco as well as the staggering economic burden caused by tobacco use. Of relevance here is a 2008 report published by the Union Ministry of Health and Family Welfare. Titled 'Bidi Smoking and Public Health', it reviewed 15 studies conducted in India and concluded that bidi smoking poses a very high risk for cancer and in many cases bidi smokers were at greater risk for oral cancer, stomach cancer and lung cancer than non-smokers.

"We cannot go on subsidizing death for the poor, and justify low taxes for bidis which is one of the most preventable cause of death in India for rural poor. By keeping bidis in the demerit goods category of GST, Government has demonstrated tremendous commitment towards safe guarding the health of poor in India and protecting them from the growing menace of tobacco products. This praise worthy step will go a long way in saving lakhs of lives and also reducing the Government spending on treating tobacco related diseases" says Dr.US Vishal Rao, Head and Neck Oncologist, Bengaluru and Member of high Power committee on tobacco control, Govt of Karnataka.

India has the second largest number of tobacco users (275 million or 35% of all adults in India) in the world - of these at least 10 lakh die every year from tobacco related diseases. The total direct and indirect cost of diseases attributable to tobacco use was a staggering Rupees 1.04 lakh crore ($17 billion) in 2011 or 1.16% of India's GDP.


Source: Equity Bulls

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