Increase taxation to discourage smoking, consumption of tobacco products: Experts

By Mahima Devkota, Kathmandu, May 6: Experts have viewed that the most effective way to reduce the mass consumption of tobacco and cigarette products is by increasing taxes on the products.

Talking to the TRN Online, they made it a point that increased taxation on tobacco products can result in less consumption and thereby contribute to good health of the people. 

Under Secretary (Law) of the Minsitry of Health and Population (MoHP) Gopikrishna Regmi said that increasing tax on tobacco and cigarette products in the country incrementally means decreasing its consumption and to decrease the consumption is to move forward towards the ultimate goal of bringing it down to zero. However, the cost of tobacco and cigarettes has not increased despite high inflation, thereby enabling people to consume them.

He said, “We have corresponded with the Ministry of Finance (MoF) this year, as in past years, about meeting the taxation rate fixed by the WHO standard. But we do not know the internal workings of MoF. Let's see how it goes this year.”

The WHO has taken taxes as the main measure among the six effective measures to control tobacco and cigarettes. In the study report published by the National Cancer Institute (NCI), in the ‘Economics of Tobacco and Tobacco Products Control,’ tax increases are considered as a popular and effective way to control the consumption rates of tobacco products. It is mentioned in the study that if the price of such goods increases by 10 percent, the consumption rate will decrease by five percent.

It has been revealed that under the influence of tobacco and cigarette dealers and industrialists, the government has not adhered to the World Health Organization (WHO) standards. The WHO has set a standard of charging 75 percent of the sales price of cigarettes and tobacco products as taxes.

Consultant of Medical Oncology at the Patan Academy of Health Sciences Dr Arun Shahi said that 80 per cent of cancer patients have a history of smoking, consuming tobacco, and alcohol. And, 90 per cent of cancer can be controlled by staying away from these products. Therefore, there is a need to increase taxes on tobacco and cigarette products by discouraging its buy and sell, advertising, and commercialization.

Dr Shahi said, “There are mainly five types of cancers, lung, head and neck cancer, which is caused by smoking cigarettes, chewing tobacco, and consuming alcohol. If we can discourage its consumption by increasing taxes, then we can reduce the cancer that is caused by its consumption.

According to a study conducted by Health Rights and Tobacco Control Network Nepal in 2023, Sri Lanka imposes 77 percent tax on tobacco products, while Bangladesh imposes 73 percent, Pakistan 61 percent and India 58 percent.

President of Action Nepal Aananda Bahadur Chand, said that Nepal imposes the lowest tax on in tobacco and cigarette products in South Asia, therefore, it is a must to increase the tax on tobacco and cigarette products for health benefits and good revenue.

He said, “Even though there has been an increase of the inflation rate by 2 to 7 per cent in the country, the tax on tobacco 2products does not increase. We do not understand why the government is not increasing tax rather than favoring the industrialists. If we increase taxes, then it will increase revenue for the country and decrease the illegal smuggling of tobacco products to other countries.”

According to him, tax on cigarettes and tobacco products can be increased if we increase the health hazard tax to 32 -33 per cent from 16 per cent and excise tax to 32 per cent from 16 to 17 per cent. But, the government seems hesitant and in favor of industrialists. 

Joint Spokesperson of the Ministry of Finance Ambika Prasad Khanal said, "Nepal charges a low tax rate on tobacco and cigarette products. But, there has been a 300 per cent rise in taxation on tobacco and cigarette products in the country in the last 10 years. There has been an active attempt to at least increase taxation by 10 per cent each year."

He stressed that taxation cannot be increased exponentially, as it has side effects in other areas as well.

According to him, tax on tobacco and cigarette products is marked in line with their impact on health. We do not side with industrialist for their vested interest; rather, we look at the health crisis that is brought into the country by using tobacco and cigarette products. Taxation cannot be increased exponentially, as it has side effects in other areas as well.

Nepal ratified the International Convention on Tobacco Control in 2003 and enacted the Tobacco Product Control and Regulation Act in 2011, signaling its commitment to tobacco control measures.