A hard habit to break: taxes won't reform smokers
Is it fair that governments unhesitatingly increase the tax on cigarettes with almost every budget they pass? No doubt this happens all over the world, says Karan Thaparcolumns Updated: Jul 27, 2014 09:05 IST
Is it fair that governments unhesitatingly increase the tax on cigarettes with almost every budget they pass? No doubt this happens all over the world. In Britain, in fact, cigarettes can’t even be displayed on open shelves. They’re stocked out of sight. But the fact practically every finance minister does it doesn’t detract from my question. You could actually say it makes it more pertinent.
Certainly Mummy, who’s 97, agrees with me. Cigarettes are a pleasure she refuses to forego. Even though she hasn’t been given one for two years or more, her memory, which can now play delightful tricks, has convinced her she’s only just put one out. So, as far as she’s concerned, she’s remains a smoker and enjoys every puff she can get!
“What’s he done to fags?” Mummy asked of Mr Jaitley’s efforts on budget day. I could tell she dearly wanted to know.
“Increased the tax six-fold,” I said, knowing that would rile her. It most certainly did.
“Hmm,” she snorted. Or perhaps it was an expletive I failed to hear. “Well, tell him that won’t put me off. I’m going to carry on smoking till I snuff it!”
Actually, it’s this sort of defiance and determination that finance ministers bank upon when they sharply increase the tax on cigarettes. They may claim they’re doing it because smoking is unhealthy. That it’s for our own good. But if that were the case the logical thing to do would be to ban cigarettes altogether. Simply making a health hazard more expensive is inadequate protection. You could even say it’s an irresponsible response.
It’s when you look at the revenue-expectation figures finance ministers assume in their budgets that you can clearly see they don’t expect anyone to give up. Mr Jaitley, for instance, hopes to garner an additional Rs 4,000 crore by kicking up excise duty from 11 to 72%. As Bill Clinton might have said, it’s the revenue, stupid!
In fact, the blunt truth goes one critical, if obvious, step further. Finance ministers know smokers won’t give up and, therefore, when they increase taxes they are making money out of this addiction. I call that exploitation. But when I put this point to Mr Jaitley in an interview it left him completely stumped. Of course, he didn’t agree.
But I have a further point to make. Consider this: the Jaitley budget has increased the excise on cigarettes six-fold but left that on bidis untouched. Yet eight times more people smoke bidis than cigarettes. Now what do you make of that?
There can be only two answers. Either Mr Jaitley cares more for the health of cigarette smokers, who are better off, than bidi smokers, who tend to be poor, or bidi smokers constitute a lobby that is so powerful Mr Jaitley dare not increase the excise. He knows he can’t handle their wrath.
In fact, it’s the second answer and Mr Jaitley was honest enough to say so. “My predecessor tried it on bidis and had to retract in Parliament. I have his experience before me,” he admitted. “You don’t come out with proposals that are bound to meet a road-block at some stage.”
Unfortunately, this doesn’t work for Mummy. When I suggested she switch to bidis she dismissed the idea with an imperious wave of her hand. “What about a hookah?” I asked.
“No thank you”, she shot back. “I’ll stick to cigarettes and, hereafter, you can bloody well pay for them!”
The views expressed by the author are personal