One tax for bidis, cigarettes: Ministry

In its campaign against tobacco use, the Health Ministry is proposing to introduce a single tax slab for bidis and cigarettes, thus reducing the price difference between different brands.

Soon to be put before the Cabinet, the proposal to rationalise tax on tobacco products says slabs between a small and long bidi or cigarette should be progressively increased. 8220;If the tax is not increased, the consumer has a choice of switching over to different brands. But if the tax is increased affecting all slabs, it will definitely have a positive impact on helping consumers kick the habit,8221; said an official.

While the tax levied on manufacturing 1,000 small bidis is just Rs 8, the tax on 1,000 long bidis is Rs 15. Likewise, there are several tax structures between small and premium-brand cigarettes: the tax levied on 1,000 small cigarettes is Rs 200, Rs 400 for average ones and Rs 1,000 for premium cigarettes. 8220;The maximum duty for one premium stick accounts for just Rs 1. The proposal is to align the slab structure,8221; the official added. The officials say that according to a World Bank report, about 6-7 per cent of the consumption will do down if the taxes are increased.