‘Sin Tax’ on tobacco below 40 pc to have negative impact’

Tuesday, Nov 1, 2016,17:08 IST By metrovaartha A A A

Guwahati | Expressing serious concerns over the proposal of the GST Council for imposing 26 per cent ‘Sin Tax’ on tobacco, public health advocates of Assam said such a tax rate below 40 per cent will negatively impact revenue and public health.

There is an overarching consensus that categorising as “sin” goods such as tobacco that are harmful to society be taxed at the highest rate under GST as recommended in the Chief Economic Advisor report which seeks a 40 per cent GST sin rate on all tobacco products including cigarettes, bidis and chewing tobacco, prominent NGO Voluntary Health Association of Assam (VHAA) said today.

VHAA demanded at least 40 per cent sin tax with a provision for states’ right to impose top-up taxes on all types of tobacco, including cigarettes, bidis, smokeless tobacco and pan masala be imposed to discourage their consumption and addiction amongst people, specially amongst the youth.

VHAA Executive Secretary Ruchira Neog said the GST council meeting that concluded on October 20 last proposed a much lower 26 per cent GST sin rate which would have significant impact on the revenue as well as the health of the nation, both of which require serious consideration.

“The rationale for a sin tax is twofold – to pay for the damage caused to society by products like tobacco and secondly to increase the price and reduce their usage,” Neog pointed out.

“A 26 per cent rate would defeat both purposes. It would significantly reduce current revenues from tobacco and would actually make tobacco products more affordable and encourage consumption, especially among vulnerable population including children and youth,” she said.

According to the Global Adult Tobacco Survey (GATS)-2010, Assam is a major victim of tobacco abuse with 39 per cent of adults in the state consuming some form of tobacco – cigarettes, bidis and smokeless (gutka, khaini, etc).

At least 52.6 per cent of males and 25.3 per cent females in Assam are found to use tobacco in some form or the other, Neog said.