Sin taxes on ads?

The Union Cabinet wants to ban all forms of cigarette advertising. I do not smoke, yet am uneasy about the ban. If a product is a social menace, we should ban it. But if it is good enough to produce, why not good enough to advertise?

And since we positively encourage other parts of the tobacco industry, is not a campaign against cigarettes alone hypocrisy?

Growing tobacco is not only allowed, it is heavily subsidised through cheap fertiliser, water and power. Many chief ministers keep demanding rescues costing crores for tobacco farmers hit by falling prices.

With what face can we wax indignant about cigarettes but subsidise tobacco cultivation? Besides, bidis outsell cigarettes four to one. Is it not hypocrisy to discourage one-fifth of this killer industry and encourage the other four-fifths?

Especially when the four-fifths is consumed by poor people with the least access to medical services? The government encourages bidis in three ways – low excise duty, tax breaks and zero labour laws for small-scale industry. This aims explicitly to favour manufacturers of bidis over cigarettes.

But if smoking is a killer, why subsidise one bunch of killers while excoriating the other? The government has long banned cigarette and liquor advertising on TV. The ban does not work. It merely gives rise to surrogate advertising.

Whisky companies advertise mineral water with the same brand name. Cigarette companies market camping gear or T-shirts with cigarette brand names. ITC has started an entire line of clothing as surrogate advertising. So why does the government continue with policies that are both hypocritical and ineffective?

The answer is clear. The government deplores the sin but loves the benefits it provides. Tobacco kills, but it also provides income to a lot of farmers. Bidis provide substantial employment and profits to small scale producers.

Tendu leaves, used to wrap bidis in, provide jobs to still more people, including tribals. Cigarettes yield thousands of crores of tax revenue.

For all this, says our political and social consensus, it is surely worth killing a few thousand people a year. Meanwhile, let us salve our conscience by banning cigarette advertising.

This will enable us to feel good while keeping the tobacco economy intact and the burning ghats busy. Ugh! If we are serious about high moral principle, we should ban tobacco cultivation and all tobacco products.

Don’t get snotty, some people will say, risk is built in so many industries. Thousands are killed every year by road vehicles, by the railways, by electrical accidents. Yet we do not ban vehicles, the railways or electricity. The benefits of these industries more than compensate for their unfortunate side-effects. Ditto with cigarettes.

I find this argument much stronger than the one based on bogus morality. Yes, in an imperfect world we constantly compromise with evils and hazards. This is as true of liquor as cigarettes.

We have experimented with prohibiting liquor in state after state, and then given it up as unworkable. Rural women overwhelmingly favour prohibition, which can win entire elections.

But it is impossible to enforce, leads to bootlegging controlled by the Mafia, and deprives the states of huge revenues. And so, although prohibition is one of the directive principles of our Constitution, almost all states permit the sale of alcohol.

Governments live with the production of dangerous, addictive products like liquor and tobacco, but discourage their consumption through enormous taxes, running into hundreds of per cent.

This is true not only in India but the world over. They are popularly called sin taxes. Drinking and smoking are sins, but rather than ban the sins we tax them at exorbitant rates.

How splendid to be able to bridge a fiscal deficit by taxing sin! Other consumers scream when taxes are raised, but sinners bear them in silence. And so sin taxes keep rising the world over.

Surely we should extend the same principle to advertising the sins. We do not ban the production of cigarettes or alcohol, we levy a 300 per cent tax on them. On the same principle, we should levy a tax of 300 per cent on cigarette and liquor adverts, not ban them. That too will fetch badly needed revenue, while discouraging consumption.

What’s more, this sin tax can be extended to all products with the same brand name, thus catching surrogate advertising. T-shirts or mineral water carrying sinful brand names can all be taxed at sinful rates, and nobody will dare complain.

It will mean less hypocrisy, less camouflage, maybe even less sin. Jaswant Singh, what are you waiting for?.

What do you think?