New Delhi: Tobacco items are the all-time favourite of Finance Ministers when it comes to taxing. Dr Harsh Vardhan’s health ministry has proposed a hike in tax on cigarettes by Rs 3.5 per stick. Unlike the previous years, the taxes are likely to be applicable to all lengths of cigarettes.
Vardhan wrote to Finance Minister Arun Jaitley briefing that the previous 19% increase in tax on cigarettes by the UPA government in February 2013 was “too small” to significantly reduce the consumption.Â
Heath ministry data shows smoking of cigarettes and bidis causes about one million deaths a year in India. World Health Organization (WHO), estimated that India spent Rs 1,04,500 crore in 2011 to deal with tobacco-related diseases. This figure is 12% more than the combined state and Central government expenditure on healthcare in the same year.Â
Vardhan also stressed on the urgent need to regulate the bidi industry. Apart from removal of tax exemption extended to bidi makers, he also suggested redefining taxation points in the bidi tax policy to ensure collection of revenue and prevent tax evasion in the long run.Â
The ministry also indicated that it will submit separate proposals on actions required at the state level percentage such as additional VAT on tobacco products and creating greater awareness against smoking.Â