Warnings blamed for graphic excise decline in Nepal

Tobacco product excise revenue in Nepal during the first eight months of the current fiscal year (16 July-15 July) fell by about 5.5 percent, and the assumption is that the drop is partly down to the imposition from May 2014 of graphic health warnings on these products, according to a story in the Daily Republica.

Cigarette manufacturers have acknowledged that tobacco consumption has declined in recent months, compelling them to cut back production.

But they blame the decline also on illegally imported cigarettes, which are said to be ‘rife in the market’, and price increases.

Data compiled by the Inland Revenue Department (IRD) show that the excise revenue fell by 5.5 percent to Rs4.57 billion during the first eight months of the current fiscal year, bucking a trend of continuous growth in recent years.

Officials at the Ministry of Finance blame the decline in tobacco excise revenue for the country’s having missed its revenue target by about two percent during the eight months.

But not everybody is upset by the drop in revenue. The Health Secretary, Shant Bahadur Shrestha, reportedly described the decline in excise duty from tobacco products as an achievement because the policy was not about revenue but about health.