Call for raising taxes on tobacco products to 65 per cent

Tags: tobacco, News
Eminent personalities in the socio-cultural and medical fraternity have urged the Kerala government to raise taxes on all tobacco products to 65 per cent as a measure to curtail its consumption and use.

In separate letters to state Finance Minister K M Mani, they pointed out that taxing tobacco products would not only help save many lives, but could also bring in much-needed revenue to the state exchequer, a release said today.

Renowned poet and playwright Kavalam Narayana Panikker, in his letter said, "taxing tobacco products will prevent draining away of precious resources on induced and preventable morbidity. With one stroke of your pen, you can save so many lives in Kerala that we can by any means."

Former Kerala University Vice Chancellor G Balamohanan Thampy said taxing tobacco products could be a major resource mobilisation avenue as Kerala faces a huge resource crunch.

Eminent filmmaker Shaji N Karun noted that increasing the price of tobacco through higher taxes was the single most effective way to encourage tobacco users to quit and to prevent children from starting to smoke.

Meanwhile, S Irudaya Rajan, economist and professor at the Centre for Development Studies here, cited Rajasthan's case to explain how tax increase can lead to greater revenues.

"The Rajasthan government has consistently increased taxes on tobacco products over the last few years and tobacco tax in the state is currently peaking at an all-India high of 65 per cent," he said.

"Currently Kerala earns revenue of Rs 312.08 crore from taxes on bidis. Cigarettes also show an upward trend in tax revenues; earnings rose from Rs 62.80 crore in 2009-10 to Rs 139.23 crores in 2011-12," Rajan said.

Justice K P Balachandran, writer George Onakkoor, former DGP K P Somarajan were also among the personalities who wrote to the government for raising taxes on tobacco products.

The state budget for the year 2013-14 would be presented in the Assembly on January 24.

According to rough estimates, there are around 55 lakh tobacco users in Kerala.

A recent study by U.S.-based Johns Hopkins University has shown that as many as 4.54 lakh lives can be saved or early deaths averted if VAT on tobacco products is increased to 65 per cent, it added.

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