Increase in Taxes on Tobacco Products Recommended for Revenue and Public Health
Summary
Nepal is advised to increase taxes on tobacco products from the current 41 percent to over 70 percent to reduce consumption and boost government revenue, following examples of South Asian countries and WHO recommendations.
Key Points
- Tax on tobacco products in Nepal is currently 41 percent, the lowest in South Asia, with recommendations to increase it by 60 percent for public health and revenue gains.
- Increasing tobacco taxes is projected to generate an additional 12 billion rupees in revenue and reduce consumption by 5 to 11 percent according to NDRI studies.
- Tobacco consumption causes around 39,200 deaths annually in Nepal and results in an estimated economic loss of 48 billion rupees per year.
- Higher taxes on tobacco will benefit public health by reducing addiction rates, protect economy by lowering healthcare costs, and align Nepal with regional and global taxation practices.
