Panel to advise Centre over taxes on tobacco, says health ministry

The group will be tasked to analyse the existing tax structure for all forms of tobacco, according to the directive. The experts will also develop a road map for tobacco tax policy and recommend immediate steps that need to be taken for making India MPOWER compliant.
In 2008, the World Health Organization identified six evidence-based tobacco control measures, known as MPOWER, which are the most effective in reducing use (Agencies/Representative use)
In 2008, the World Health Organization identified six evidence-based tobacco control measures, known as MPOWER, which are the most effective in reducing use (Agencies/Representative use)
Updated on Oct 19, 2021 11:31 PM IST
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ByRhythma Kaul, New Delhi

A newly constituted group of experts will advise the central government on how to tax all forms of tobacco from a public health perspective, the health ministry said in an office memorandum last week.

The suggestions of the expert group could be incorporated for consideration in future budget sessions of Parliament, said the document issued by health ministry’s tobacco control division. HT has reviewed a copy.

“…the tax and price policies are widely recognised to be one of the most effective means of influencing the demand for and thus the consumption of tobacco products. To develop a proposal for comprehensive tax policy for all tobacco products with a public health perspective, it has been decided to constitute an expert group…,” read the office memorandum.

The group will be tasked to analyse the existing tax structure for all forms of tobacco, according to the directive. The experts will also develop a road map for tobacco tax policy and recommend immediate steps that need to be taken for making India MPOWER compliant.

In 2008, the World Health Organization identified six evidence-based tobacco control measures, known as MPOWER, which are the most effective in reducing use. The measures include monitoring tobacco use and prevention policies; protect people from tobacco smoke; offer help to quit tobacco use; warn people about the dangers of tobacco; enforce bans on tobacco advertising, promotion and sponsorship; and raise taxes on tobacco.

The expert group is also mandated to suggest various options or models of tax rates and standards for consideration in budget 2022-23 and future budget sessions.

Taxes need to be increased periodically to offset the effects of inflation and of rising incomes and purchasing power, the UN health agency said in its Report on the Global Tobacco Epidemic, 2013. “If the real price of tobacco after inflation does not increase faster than consumer purchasing power, consumption will increase because tobacco becomes relatively more affordable,” it said.

In India, tobacco products are taxed at 28% under GST. In 2014, the health ministry ordered that all tobacco products should have pictorial warnings that should cover 85% of the packaging.

The members of the newly constituted nine-member expert group include Vikas Sheel, additional secretary and mission director, Union health ministry; Pulkesh Kumar, deputy secretary, health ministry; Rijo M Jhon, health economist, Rajagiri College of Social Sciences, Kerala; and representatives of Niti Aayog, department of revenue, department of central board of indirect taxes and customs, GST Council, and WHO country office for India.

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Tuesday, November 30, 2021