The Federation of All Indian Farmers Association (FAIFA), representing the cause of millions of farmers and farm workers of commercial crops across the States of Andhra Pradesh, Telangana, Karnataka and Gujarat, has stated that the steep increase in tobacco taxation in the recent past led to growth of the smuggling of cigarettes in the country.
"Increase in smuggling of cigarettes is evident by the growing number of seizures of smuggled cigarettes which has more than doubled to 3,108 in 2016-17 from 1,312 in 2014-15 as per the details shared by the Finance Ministry in Parliament in December 2017.
"It is important to note that the reported seizures are only the tip of the iceberg of a much larger operation, as for every seizure dozens of consignments escape any surveillance," said the body which has also initiated letters to Prime Minister's Office and the Union Health Ministry.
Illegal cigarette trade is more than 25 per cent of the Cigarette Industry in the country making India the fourth largest and fastest growing illicit market in the world. This has resulted in revenue losses of approximately Rs 13,000 crore to the government and is growing annually.
"Unlike India, no other country in the world has a huge and wide-spread dependence on the tobacco crop for livelihood.
"All efforts of the tobacco control programmes, in the form of high taxation, Graphical Health Warnings (GHW), or other regulatory overreach are largely focused on the FCV type of tobacco crop, which has boosted illicit trade in the country," said Murali Babu, General Secretary, FAIFA.
FAIFA has also urged the government to have a taxation policy, that disincentivises cigarette smuggling.
"Protection of the domestic legal industry in the country will help in sustaining livelihood opportunities and reduce revenue leakages," said FAIFA in a statement.
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