Call for special Covid cess on tobacco products in Assam

GUWAHATI: Public health groups, along with doctors and economists have urged the GST Council, in its June 12 meeting, to consider a special Covid-19 cess on tobacco products to raise additional tax revenue for a special stimulus package.
They have appealed for a Covid cess on cigarettes, bidis and smokeless tobacco products which can provide a revenue of Rs 49,740 crore (497.4 billion) covering about 29% of the package. Based on studies conducted in several countries, smokers and smokeless tobacco users may be at greater risk of severe illness when confronted with Covid-19 since it affects the lungs.
They felt that imposing a cess on all tobacco products would not only help raise the much needed revenue to fund the stimulus, but it would also prevent the spread of the virus, especially among vulnerable sections by making tobacco products unaffordable and forcing them to quit.
Economist and health policy analyst Rijo John said unprecedented financial resources will be needed for the country to recover from the economic shock Covid has created. "Even though imposing additional taxes on the general public might not be a viable policy option when consumption needs to be boosted, a special Covid cess on tobacco, could be a win-win situation, as it will discourage tobacco consumption and reduce Covid-related risks while bringing in substantial revenue for the government," said John.
He added that a cess of Re 1 per stick of bidi and a significant tax increase on cigarettes and smokeless tobacco products are expected to generate additional revenue to the tune of Rs 50,000 crore.
"Imposing a cess on all tobacco products, including bidis, is a winning proposition for the government as it will provide the much needed additional revenue for the Covid 19 stimulus package for providing relief to the people while motivating millions of tobacco users to quit tobacco," said advocate Ajoy Hazarika, secretary of Consumers' Legal Protection Forum, Assam.
He said that while WHO recommends total taxes to represent at least 75% of the retail price for all tobacco products, currently, the total tax burden (tax expressed as a percentage of final retail price) is only 49.5% for cigarettes, and 63.7% for smokeless tobacco in India.
Bidis, on the other hand, Hazarika said enjoy an extremely low tax burden of only 22%, despite being least harmful and are used by almost twice as many Indians as cigarettes, resulting in an estimated annual economic cost from diseases and deaths to the tune of Rs 805.5 billion, or 0.5% of India's GDP.
Director of Dr B Borooah Cancer Institute, Guwahati, Dr Amal Chandra Kataki, said, "There is ample evidence about bidis being the killer among the poor. These should be made unaffordable to save them from a lifetime of misery and suffering. I urge a complete ban on all smokeless tobacco products and pan masala, which are responsible for 90% of oral cavity cancer in India."