Ahead of the 45th GST council meeting, the Consortium for Tobacco Free Karnataka (CFTFK) and other organisations working on tobacco regulation have urged the Karnataka government to seek a hike in the compensation cess on all tobacco products so that they become unaffordable for the vulnerable, especially children.
Representatives of Consortium for Tobacco Free Karnataka (CFTFK) met commercial tax commissioner C Shikha, Chief Minister Basavaraj Bommai’s secretary V Ponnuraj and discussed the need to hike tobacco tax, reduce tobacco consumption to augment the revenue of the government amid the economic crisis caused by the Covid-19 pandemic.
CFTFK has also written a letter to CM Bommai and additional chief secretary ISN Prasad requesting their support to raise the topic in the GST council meeting.
The upcoming GST council session scheduled to be held in Lucknow on Friday (September 17) will be the first physical meeting since Covid-19 hit India and discussions on ‘compensation cess’ are likely.
Public health researcher and advocate Dr Upendra Bhojani said, “bidis are the most widely consumed and are often cheaper among the available tobacco products. The World Health Organisation recommends higher taxes on all tobacco products as a measure to discourage new users, encourage current users to quit and raise public finances to fund healthcare delivery”.
“Compensation cess should be levied on bidis which have been exempted all these years. Raising the cess on all tobacco products (bidis, cigarettes and chewing tobacco) would reduce affordability and hopefully drive down the consumption of these hazardous products leading to health gains, especially among youth and vulnerable sections of the population,” he said.
An added advantage is that taxes on hazardous and luxury goods can enhance public finances for resource-constrained healthcare delivery systems, Dr Bhojani said.
Renowned oncologist Dr Vishal Rao, who is also a member of the Karnataka government’s high-power committee for tobacco control, said, “on a day-to-day basis, we find several people, especially those from vulnerable groups, spending their hard-earned money on cancer treatment. One in every third person uses tobacco in one form or the other. Hence, one in every third person is likely to contract some form of non-communicable disease if this alarming trend continues unabated”.
“By raising the tobacco tax, we can break this vicious trend and safeguard the future of lakhs of people. The ongoing pandemic has forced us to make health our number one priority and raising tobacco tax will be a key step in that direction,” he said.
“We discussed with officials and have conveyed how this tobacco tax hike is needed to protect children. Chief Minister Basavaraj Bommai was representing Karnataka at the GST Council meetings all these years and he had pitched the idea of hiking taxes on luxury goods, tobacco and pan masala. We are hopeful that he will raise the issue again and save children from tobacco addiction,” said S J Chander, convenor, Consortium for Tobacco Free Karnataka.