The Nepali government raised taxes on alcohol and tobacco products in the Finance Bill presented along with the budget statement for fiscal year 2022-23.
Excise duty rates for alcohol have been increased as follows:
- For a liter of beer with alcohol the excise tax was raised to Rs. 228 from Rs. 198.
- For a liter of beer without alcohol the excise tax was raised to Rs. 30 from Rs. 20.
- Excise duty on whisky products with up to 48.5% alcohol content increased to Rs. 1750 – Rs. 2059 (minimum – maximum) for a liter from the previous Rs. 1592- Rs. 1872.
- Excise duty on whisky products with up to 42.8% alcohol content increased to Rs. 1306 – Rs. 1741 (minimum – maximum) for a liter from the previous Rs. 1188- Rs. 1584.
- Excise duty on whisky products with up to 39.94% alcohol content increased to Rs. 1215 – Rs. 1735 (minimum – maximum) for a liter from the previous Rs. 1105- Rs. 1578.
As Movendi International has reported, liquor products are one of the non-essential and luxury items listed under the import ban employed by the government to curtail the fast-depleting foreign exchange reserves amidst the country’s economic crisis. The liquor import ban is set to remain in effect till mid-December.
The sustained liquor import ban despite alcohol industry lobbying shows that the government understands that alcohol is not an ordinary commodity. The government recognizes that people and communities in Nepal are currently facing a heavy alcohol burden.
This burden includes a 376% increase in deaths caused by alcohol between 1990 and 2016.
Raising excise taxes on alcohol products is a high-impact, cost-effective, and evidence-based policy solution recommended by the World Health Organization in the SAFER package to reduce population-level alcohol consumption and resulting harm.
The alcohol excise tax increase stands to yield triple-win benefits in improving the health and economy to benefit all Nepali citizens.
As Movendi International has reported, alcohol taxation has triple-win benefits.
- Domestic resource mobilization
- Alcohol taxation generates government revenue for financing development and health promotion, such as NCDs prevention – a major political priority in Nepal.
- Reducing alcohol’s health and development burden
- Alcohol taxation reduces population level alcohol use and thus reduces the overall public health, social and economic harm caused by alcohol – such as violence against children and women.
- Prevention of alcohol initiation and health promotion
- Alcohol taxation helps maintain high-levels of alcohol abstention rates in low- and middle-income countries, like Nepal.
Raising alcohol taxes is a step in the right direction in protecting Nepali people and communities from the harm caused by alcohol products. The long-term solution to prevent and reduce alcohol harm is to improve alcohol policies and to implement a comprehensive and ambitious agenda for alcohol law reform, encompassing excise taxes adjusted to inflation.
One of the clear lessons of the COVID-19 pandemic is that a country’s economy and health are not separate entities. Using proven interventions to prevent and reduce alcohol harm will reduce both direct and indirect costs due to alcohol that burden the health, social and economic development of Nepal.
At the same time increasing alcohol taxes will generate revenue which can, in turn, be invested in the health, prevention, and development of Nepali citizens. Improved alcohol policies are an essential part of the economic recovery of Nepal.