India: Big Alcohol Requests Tax Cuts
Big Alcohol requests tax cuts in India ahead of the 2020 budget. Claiming current taxes were too high and a hindrance the alcohol industry wants tax reductions on scotch.
80% of scotch imports are brought in as bulk while 20% are are imported as bottled products. Bulk scotch is used in India whiskey and currently scotch is taxed at 150% in India.
We would expect the government to reduce the customs duty on this important raw material from 150% to a reasonable value,” said Amrit Kiran Singh, Executive Chairman of International Spirits and Wine Association of India (ISWAI), as per, Financial Times.
Big Alcohol is complaining that scotch is used to improve Indian whiskey and therefore, helps increase government revenue. The industry has also made far reaching claims that the government was hypocritical about alcohol laws, citing the legal minimum age (25 years) and restriction of alcohol sales.
However, all these laws, including taxation and sales restrictions on alcohol are part of the World Health Organization-recommended best buy policies to reduce alcohol consumption and harm.
Big Alcohol is trying to mislead people with bogus claims
The idea that reducing taxes will increase government revenue is inaccurate and used by the industry to mislead policy makers and the public. The truth proven by data contradicts this falsehood. A recent study found that the cost of alcohol in India is greater than the entire health spending.
The economic loss from adverse effects of alcohol consumption is about 1.45% of the gross domestic product (GDP). For comparison, the government’s annual expenditure on health is about 1.1% of the GDP.
Another study conducted by the government in February 2019 explores the magnitude of alcohol problems within India. According to that study,
- Alcohol use has been reported in all the age groups, including among children aged 10-17 years.
- About 14.6% of the population, between 10 and 75 years of age, uses alcohol. This translates to 160 million people.
- Every third alcohol user in India needs help for alcohol related problems.
- Only about 1 in 38 people with alcohol dependence, report getting any treatment or help with alcohol problems.
The available research suggests, Big Alcohol claims of boosting revenue with reduced taxes are bogus. Reducing taxes will increase alcohol consumption and lead to more harm and economic loss for the country. India can not afford for alcohol harm to rise further, with predictions suggesting the country will miss the health-related and other sustainable development goals (SDGs) and will face an increasing NCDs burden.
It is crucial that the government maintains evidence-based alcohol taxation adjusted to inflation, to drive down alcohol harm and safeguard Indians.