HPVA hails government's decision to increase VAT on tobacco items



Shimla: Himachal Pradesh Voluntary Health Association (HPVHA) hailed the decision of Himachal Pradesh Cabinet for increasing VAT on tobacco Products from 13.75 percent to 16 pc.

While addressing media persons here today, Director of HPVHA and retd. IAS officer Nivas Joshi appreciated the government’s decision, terming that it would desist the new tobacco user to become its victim. 52 non-government organisations, under the umbrella of HPVHA have lauded the great step taken by the government of Himachal Pradesh. Voluntary Health Association of India(VHAI) working both at the national level and state level have acclaimed the right step of the state government taken in the right direction.

The Global Adult Tobacco Survey India 2009-10 conveys that about 21 pc (equals 1276222 persons) population of this hill state is using tobacco product in one or the other of its form, consuming 18 pc of total tobacco production, which is higher than that of the average tobacco users in Northern India. To be precise, Himachal Pradesh has 18.1 pc of the male population of 15 years and above, who are daily-users of tobacco products as compared to the average of 16.5 pc in the Northern India.

The decision of the cabinet is to impose uniform taxation i.e. 16pc on all the tobacco products – cigarettes, cheroots, cigars, bidis, oral tobacco products-. Earlier, the tax on bidis was less, i.e. 4 pc only. It meant a loss of Rs1.94 crore annually to the state government. The total expenditure of the population of Himachal Pradesh on Bidis annually is Rs16.21 crore. VAT collected at the rate of 4 pc on it meant revenue of Rs65 lac only. With VAT increased to 16 pc, the revenue will go up to Rs.2.59 crore.

By increasing the taxes on tobacco products the government has shown tremendous political commitment, as raising taxes will not only generate additional revenue, but also protect the youth and masses from tobacco use and will also reduce the government spending on treating tobacco related disease. It also has a saluting effect by curtailing the new entrants to the network of tobacco product consumption. If the number of tobacco-users is reduced, there would be less expenditure of the government on the tobacco related diseases. One rupee spent on tobacco products means Rs16 spent on diseases that crop up from using this dreaded menace. Moreover, the government has decided to declare all the district headquarters ‘Smoke-Free’ by the end of May 2011 as Shimla is today. The increased taxation on tobacco-products is the appropriate step in order to achieve that goal too.

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