Call for Steep Hike in Tobacco Taxes to Curb Consumption

Economists and health experts in India are advocating for a significant increase in tax rates on tobacco products to discourage consumption. Currently, the central government imposes a 53% tax on cigarettes, 16% on Beedis, and 64% on smokeless tobacco products. With over 13 lakh people in the country succumbing to tobacco-related illnesses annually, experts emphasize the need for a tax hike to dissuade consumers.

The suggestion is especially relevant as taxes on tobacco products have remained largely unchanged in the post-GST regime. Advocates are proposing a “health tax” or excise tax increase on tobacco as one of the most effective tools to reduce consumption. India has one of the lowest tobacco prices globally, and economists recommend a tax rate of 75% on cigarettes and smokeless tobacco, and 63% on Beedis to align with international practices and discourage tobacco use.