There’s one tobacco product India forgot to tax. And that hurts the poorest
In a recent overhaul of its tobacco taxation policy, the Indian government increased taxes on cigarettes, pan masala, gutka, and chewing tobacco to a 40 percent rate, up from 28 percent. However, the government simultaneously reduced the tax rate for bidis, the most widely smoked tobacco product largely consumed by the poorest and rural population, from 28 percent to 18 percent.
This decision widened the tax gap between bidis and cigarettes, which is unfair and disproportionately harms the poorest. A study found that increasing the tax on bidis while eliminating exemptions for small producers could save 48 million years of life and generate a total economic benefit of 2.45 percent of India's total health expenditure over 50 years.
The reform should also raise the central excise taxes on cigarettes and end the small-producer exemption for bidis to generate revenue for workers' welfare and transition programs.
Written by urgent.news from The Indian Express's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
