Kathmandu, May 13
Cigarette
smoking has caused a loss of about Rs. 40 billion, 1.04 per cent of the total
Gross Domestic Product to the economy in 2020, concluded a recent research of
Nepal Development Research Institute (NDRI).
The loss incurred in the treatment of diseases
caused by tobacco products and due to the loss of productivity in people and
untimely death.
If we add the damage done by the
non-smoking tobacco items, the amount could be much higher, said NDRI Executive
Director Dr. Jaya Kumar Gurung at a virtual press meet organised on Thursday to
publish the findings of a three-year study.
However, the
total revenue collection from the tobacco and related products was only Rs.
18.55 billion in 2020. At the same time, consumers of tobacco products range
about 32 per cent of the total population and are continuously growing, said
the NDRI.
It suggested increasing
tax on tobacco products in order to discourage consumption, including the new
beginners, and collect higher revenue.
"Tax on
tobacco products in Nepal is only 30 per cent (excise duty 16.18 per cent,
value added tax 11.5 per cent and health tax 2.39 per cent) while the World
Health Organisation has set a standard of 70 per cent," concluded the
study.
According to it, Nepal has the lowest tax on
retail price of the tobacco products in South Asia against 71 per cent in
Bangladesh, 68.73 per cent in the Maldives, 66.17 per cent in Sri Lanka, 56.63
per cent in Pakistan and 54.04 per cent in India.
The share of
excise duty from tobacco products was 2.54 per cent in 2009/10 which has gone
down to 1.82 per cent in 2018/19.
The study has
suggested that the increased tax would result in decreased consumption and
increased revenue. The move would also help in better public health and help
reduce the health expenditure in the long run.
Dr. Gurung said that people tend to
increase the consumption of tobacco-related products during difficult times like
COVID-19 pandemic which causes more negative impacts on health conditions.
"We would
like to urge the government to address the issue through the budget of the next
fiscal year 2021/22. The tax on tobacco products should be increased by 50 to
70 per cent and in the next three years, it should be brought to the level of
India," he said.
An increase by 50-70
per cent in tobacco tax would help collect Rs. 8 billion to Rs. 12 billion in a
year and reduce consumption by 1.4 per cent to 6.9 per cent, according to the
study. It said that about one-fourth of youth in Nepal consume tobacco related
products, therefore, retail selling of cigarette should be strictly controlled.
Speaking on the occasion former Minister
for Science and Technology Ganesh Shah said that there was a need for launching
an anti-tobacco campaign in the country.
Manufacturers of the tobacco products at
times present the excuse of employment generation but the government should
take a policy deviation in terms of industrial priority since the jobs created
by this sector is nominal, he said.
Health Economist
Dr. Devi Prasad Prasai said that Nepal loses Rs.18 billion revenue and
1000-2000 lives in a year because of low tax on tobacco.
He also said that
the impact of tobacco industry on employment generation is not significant.
"They claim of producing jobs for
about 2,000 people in formal sector. This is an insignificant number given the
negative impact of tobacco products. Life of about 2,000 people could be saved
if the tax-rates are raised. It will also discourage the new users from smoking
and chewing tobacco," said. Dr. Prasai.
Kunj Joshi, Senior Health Administrator at
the National Health Education, Information and Communication Centre (NHEICC),
said that controlling tobacco products should be the cross-cutting agenda and
considered important by all the ministries. This is the only way to control the
pervasive use of tobacco products, he said.
The study was jointly carried out by the
NDRI, NHEICC, Nepal Health Research Council, Nepal Cancer Relief Society, and
Equal Access.
Published in The Rising Nepal daily on 14 May 2021.
