Tax on Cigarettes: Finance Minister Nirmala Sitharaman presented the Union Budget on Wednesday. Many important announcements have been made by the Finance Minister in this budget. Along with this, cigarette smokers have got a jolt in this budget. Actually, the government has made a big attack on cigarettes and has announced to increase in the tax on cigarettes. This will increase the prices of cigarettes and cigarettes will become expensive.
Tax on cigarettes
The Finance Minister has announced a 16 percent increase in the tax on cigarettes in the budget. Following this announcement, experts have claimed that a substantial increase in tax and stronger laws on all tobacco items will not only bring the best of human capital by ensuring better health of citizens, but also bring Prime Minister Narendra Modi’s vision of a $5 trillion economy. Attitude will also help. It will also help in achieving the vision till 2025.
Tax
In fact, the healthcare burden due to tobacco consumption in India is about 1.04 percent of the GDP, leading many to poverty. According to experts, taxation on tobacco can be a very effective tool to generate revenue as the product is elastic in nature, and higher taxes will not have any adverse effect on the revenue earnings of the government.
India is among 182 countries that have signed the WHO Framework Convention on Tobacco Control, which recommends a tax of at least 75 percent of the retail price of all tobacco products. However, in India, there is a 52.7 percent tax on cigarettes, 22 percent on ‘bidi’, and 63.8 percent on chewing tobacco. On the other hand, after Finance Minister Nirmala Sitharaman announced an increase in tax on cigarettes in the budget for the financial year 2023-24, the shares of other cigarette companies including Godfrey Phillips India and ITC Limited fell by up to five percent.
Read More: Budget 2023: Modi government has kept 1 lakh 75 thousand crore rupees in this scheme; will get benefit
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