Tobacco products: Need to raise taxes

Prof. (Dr.) Dharmakanta Kumbhakar

(drkdharmakanta1@gmail.com)

According to the fifth National Family Health Survey (NFHS-5) for 2019–21, about 38.0 percent of men (28.8 percent in urban and 42.7 percent in rural India) and 8.9 percent of women (5.4 percent in urban and 10.5 percent in rural India) of age 15 years and older currently consume tobacco either in smoking (cigarette, bidi, hookah, etc.) or smokeless forms (gutkha, khaini, panmasala, etc.). Some Indians also use tobacco as toothpaste. Gutkha and panmasala have become increasingly popular among young people, especially schoolchildren and youths in India. The number of female smokers is also increasing.

The alarming factor is that many others (38.7 percent at home, 30.2 percent at the workplace, and 31.6 percent at public places like government buildings, health care facilities, restaurants, public transport, etc.) are exposed to passive smoking.

The problem of tobacco consumption in Assam is more complex than probably in any other state. Apart from being smoked in the form of cigarettes, bidis, and pipes, tobacco is also chewed along with paan and betel nut with slaked lime in Assam. According to the NFHS-5, about 51.8 percent of men (43.9 percent in urban and 53.3 percent in rural Assam) and 22.1 percent of women (16.2 percent in urban and 23.2 percent in rural Assam) of age 15 years and older consume tobacco in any form.

Tobacco exposure kills millions of people and ruins the health of millions more worldwide. It is associated with more mortality and morbidity than any other personal, environmental, or occupational hazard. It is a common cause of addiction, preventable illness, disability, and death. Tobacco exposure is currently responsible for 10 percent of adult deaths worldwide. Chewing tobacco is a determining etiological factor in cancers of the mouth, lips, tongue, and pharynx. Smoking tobacco is responsible for the majority of lung cancer and chronic obstructive pulmonary diseases. Smoking also causes cancer of the upper respiratory and gastrointestinal tracts, pancreas, urinary bladder, and kidneys and increases the risk of peripheral vascular disease, stroke, and peptic ulceration. Moreover, news had come that smokers were more likely to develop severe diseases with COVID-19 compared to non-smokers. Most smokers die prematurely. Smokers usually die six to ten years earlier than their non-smoking counterparts. Maternal smoking is an important cause of foetal growth retardation. In addition to the health hazards of mainstream tobacco smokers, there are risks associated with exposure to passive smoking or environmental tobacco smoke (ETS). Research shows that ETS increases the risk of lung cancer, ischemic heart disease, and acute myocardial infarction. The Environmental Protection Agency classified ETS as a known human carcinogen in 1992. ETS is especially hazardous for women, infants, and young children. It is a major cause of foetal growth retardation and sudden infant death syndrome. Young children in households with cigarette smokers suffer from an increased risk of respiratory and ear infections and the exacerbation of asthma.

The burden of tobacco-related disease and death is high in India. Tobacco-induced diseases claim around 13 lakh people every year in India. Tobacco-related cancers account for half of all the cancers in males and one-fourth of all cancers in females in the country. India has one of the highest rates of tobacco-related oral cancer in the world. The North East and Assam also have one of the highest incidence rates of tobacco-related cancers in the country. The incidence of oral cancer in the North East and Assam is linked to chewing tobacco. Moreover, there is a significant economic burden in the country due to resources invested in health care to treat tobacco-related diseases. Besides the treatment-related expenditure, the indirect costs due to absence from work, premature death, loss of a working member in the family, etc., constitute a greater burden on the nation. Realising the health hazards of tobacco consumption, the Government of India has implemented many anti-tobacco laws to control tobacco consumption amongst the public. India’s anti-tobacco legislation, first passed in 1975, was largely limited to health warnings and has proved to be insufficient. A new piece of national legislation, COTPA, 2003, notified on February 25, 2004, represents an advanced law including a ban on smoking in public places, advertising, and forbidding the sale of tobacco to minors. This Act covers most tobacco products like cigarettes, cigars, bidis, cheroots, pipe tobacco, hookah tobacco, chewing tobacco, panmasala, and gutkha.

Lately, many states in India have taken additional steps such as a ban on tobacco advertising, increasing taxation on tobacco products, a ban on gutkha and manufactured smokeless tobacco products, regulation of the sale of tobacco products (the Juvenile Justice Act imposes harsh penalties on the sale of tobacco products to minors, and the Legal Metrology Act bans the sale of loose bidis, cigarettes, etc.), making sure all workplaces and public places are smoke-free, placing clean and 85 percent pictorial warnings on cigarette packets, plain packaging, and generation of awareness against tobacco-related health hazards amongst the public for more effective tobacco control. Although in recent years, India has seen developments in tobacco control, improper implementation of the anti-tobacco laws, low public awareness levels, the lack of a sustained campaign against the tobacco menace, and the low price of tobacco products are some causes of the partial failure of tobacco control in India.

The government should implement harsh anti-tobacco laws and ban tobacco advertising, promotion, and sponsorship. The government must protect people from exposure to tobacco smoke by creating completely smoke-free indoor public places, workplaces, and public transport. The fight against tobacco, however, should not be restricted to government initiative alone; voluntary organisations and the media can also be very effective in this. As tobacco-related health hazards are preventable by quitting tobacco consumption, the government, NGOs, and media should start vigorous campaigns focusing on the health hazards of tobacco consumption and highlighting the bountiful benefits once the habit is kicked. One needs to quit tobacco to be a winner in life. Parents, teachers, and doctors should motivate children and youths against tobacco consumption.

Tobacco products in India are cheap. Bidis, in particular, are under-taxed and available at a very low cost. Tobacco taxes in India are below the rate recommended by the World Health Organisation (75 percent) that is commonly present in countries with effective tobacco control policies. In India, the effective tax rate (Central Excise Duty + GST + National Calamity Contingent Duty (NCCD) + compensation chess) on cigarettes is 52.7 percent (though there is slight variation depending on the length of the cigarette), on smokeless tobacco is 60 percent, and on bidi is 22 percent (after tax exemptions for small bidi producers). Moreover, tobacco taxes in India are not regularly adjusted for inflation, and over time, tobacco products are becoming increasingly affordable. In this year’s budget, there has been a minor revision to the NCCD, increasing it by 16 percent for cigarettes. The NCCD itself constitutes 10 percent of the overall tax on cigarettes, so the effective overall tax increase was only 1.5 percent. Under the WHO Framework Convention on Tobacco Control (WHO FCTC), countries should implement tax and price policies on tobacco products as a way to reduce tobacco consumption.

Taxes on tobacco products should be increased in India, making them less affordable, to reduce tobacco consumption. Individuals and civil society organisations should encourage the government to raise tobacco taxes. The cess can be easily increased under GST. The present GST on tobacco products is 28 percent and on tobacco leaves is 5 percent. It can be revised upward. In NCCD too, we have room to increase it. Significant increase in cess on cigarettes is needed. Higher taxes are especially effective in reducing tobacco use among lower-income groups, discouraging youths from initiating cigarette smoking, and encouraging current smokers to quit. Studies show that a tax hike that increases tobacco prices by 10 percent decreases tobacco consumption by about 4 percent in high-income countries and by up to 8 percent in most low- and middle-income countries. Studies in India find that a 10 percent increase in tobacco prices is estimated to reduce bidi consumption by 9.1 percent and cigarette consumption by 2.6 percent. If India increases its tax rate on tobacco, millions of lives will be saved. It will provide the government with additional tax revenue. Regular adjustments of tobacco taxes to account for inflation would help ensure high relative prices across tobacco products. Earmarked revenues can be used to support a comprehensive tobacco control effort and other social and public health programmes.

Clearly, preventing the use of tobacco in various forms is one of the major concerns of society. We, the members of society, along with policymakers, should help in the achievement of a tobacco-free society so that we can protect the health of the coming generations.