Business Standard

Kerala civil society bats for raising tax on tobacco products

Image

BS Reporter Kochi
As the Kerala Budget date nears, eminent social advocates, thinkers and doctors have appealed to the government to raise taxes on all tobacco products to 65 per cent. In separate letters to the finance minister KM Mani, they have pointed out that taxing tobacco products would not only help the state save many precious lives but can also bring in much-needed revenues to the exchequer.

Renowned dramatist, poet and theatre personality Kavalam Narayana Panikker said taxing tobacco products would prevent draining away of precious resources on induced and preventable morbidity.

At a time when our state was facing a huge resource crunch, taxing tobacco products would prove out to be a major avenue for resource mobilisation, said former vice chancellor of Kerala University G Balamohanan Thampy. Well-known filmmaker Shaji N Karun said increasing the price of tobacco through higher taxes is the single most effective way to encourage tobacco users to quit and to prevent children from smoking.
 
Economist and Professor of Centre for Development Studies, Thiruvananthapuram, S Irudaya Rajan, in his letter, cited the case of Rajasthan to explain how tax increase can lead to greater revenues.

The Rajasthan government has consistently increased taxes on tobacco products over the last years and the tobacco tax in the state is currently peaking at an all-India high of 65 per cent. The state earns a revenue of Rs 312.08 crore from taxes on bidis.

The tax revenues from cigarettes rose from Rs 62.80 crore in 2009-10 to Rs 139.23 crore in 2011-12 in Rajasthan.

There are around 5.5 million tobacco users in Kerala and a study conducted by the Johns Hopkins University, USA, showed that as many as 454,000 lakh precious lives can be saved/early deaths can be averted if the VAT on tobacco products is increased to 65 per cent.

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jan 09 2014 | 8:38 PM IST

Explore News