New Delhi, Feb 17 The Authentication Solutions Providers' Association (ASPA) has urged the government to eliminate illicit tobacco trade as only 10 per cent of tobacco consumption in the county constitutes legal cigarettes.
Illicit tobacco trade included chewing tobacco, bidi and gutkha, it said.
"The legal cigarettes' share in tobacco consumption in India has declined from 21 per cent in 1981-82 to 10 per cent in 2016-17. During the same period, the overall tobacco consumption increased 33 per cent. This drop in legal cigarette revealed the shift to illegal cigarette," it said.
Titled 'Report for Nation - Confronting illicit tobacco trade in India for economic & development', the APSA advisory report said illicit trade siphons tax revenues and hurts the authorities' capability to provide good governance. It also reduces allocation of resources for socio-economic development, particularly in low-income nations that rely on consumption taxes.
According to experts, the yearly loss of income from tobacco taxation globally was $40-50 billion, that's about 600 billion sticks or 10 per cent of consumption.
Stating that all tobacco products are harmful to human health, even if produced and marketed legally, the APSA said illicit tobacco harmed people in additional ways.
It's estimated that the illegal market reduces average cigarette prices by 4 per cent and is accountable for about 2 per cent higher cigarette consumption.
Nakul Pasricha, ASPA President, said, "Illicit trade in tobacco and tobacco-based products is a global problem, leading governments to join public health agencies in calling for stronger measures to combat it. Implementation of tax stamps has been one of the most effective measure."
In Bangladesh, illegal cigarette trade was reduced from 20 per cent in 2000 to 1.2 per cent in 2009, and in Turkey tobacco tax revenue rose 31.5 per cent within the first year of its implementation, even though tax rates remained the same.
In India, according to reports, usage of tax stamps has minimised the tragedies due to spurious liquor and increased the excise revenue collection by 15-20 per cent. It could generate similar results for the tobacco industry, Pasricha said.
( With inputs from IANS )