Public health institute urges Odisha to raise VAT on tobacco to 50%
October, 09th 2012
Mumbai-based Healis-Sekhsaria Institute of Public Health which is running a campaign titled Voice of Tobacco Victims to spread awareness on tobacco abuse, has urged the Odisha government to raise VAT (value added tax) on cigarettes and smokeless tobacco to 50 per cent.
The institute has requested Odisha to emulate states like Uttar Pradesh and Rajasthan that have already hiked VAT on tobacco products to discourage their consumption.
While Rajasthan has taxed all tobacco products at 50 per cent, Uttar Pradesh has increased VAT on tobacco products to 50 per cent and that on smokeless tobacco to 55 per cent. The financial and human costs of tobacco use are many times any revenue collected on tobacco products. It is also much more than the employment generated from the tobacco industry, Ashima Sarin, project director of the institute wrote to chief minister Naveen Patnaik.
The institute has argued that raising tax is the most effective means to prune tobacco consumption. According to figures compiled by the institute, 14.2 million people in Odisha use tobacco while 13.2 million (or 43 per cent of the population) use smokeless tobacco. As a fall out of unhindered tobacco consumption, 5.7 million people in the state are likely to die untimely death due to serious ailments like heart attack and pulmonary cancer.
Meanwhile, the Odisha government has sought the views of the commissioner of commercial taxes on the proposal to hike levy on cigarettes and smokeless tobacco.
It may be noted that in December last year, the state government had raised VAT on tobacco products from 13.5 per cent to 25 per cent, a move that promised an additional revenue of Rs 50 crore per annum.