POLICY BRIEF - Finance Act 2024: - Implications of Cigarette Tax Policy

of the Finance Division.2 Setting such an ambitious SPDC Policy Brief 1 FED SHARE IN THE RETAIL PRICE the level of the minimum price, which is set at 60 percent of the threshold. [...] Thus, the minimum price Currently the average FED share in the consumer of a 20-stck pack (excluding GST) has increased price of cigarettes is estimated to be 54.8 percent, from Rs 108 to Rs 150 per pack. [...] As shown in Figure pack) if the printed retail price (excluding GST) 4, the majority of the brands (59 percent of the exceeds Rs 9,000 per thousand cigarettes (or Rs 180 economy brands) fall in the category of having a per 20-stick pack). [...] The firms The FED revenue target set by the government will have to increase the prices of these brands to at for 2024-25 seems unrealistically high and least Rs 150 per pack. [...] To address this, the government should consider adopting Tier threshold new Rs 250 per pack a two-pronged strategy of increasing the FED rate and developing necessary regulations to Price may rise without implement the provisions in the Finance Act 59% of brands contributing to FED aimed at combating the illegal cigarette trade.