Anti-tobacco campaigners have demanded increasing prices of cigarettes and other tobacco products by imposing specific taxes.
It is needed to make Bangladesh a tobacco-free country by 2040, as envisioned by Prime Minister Sheikh Hasina.
The Research and Advocacy Organization PROGGA (Knowledge for Progress) and Anti-Tobacco Media Alliance (ATMA) placed their demands and unveiled proposals for the upcoming 2021-2022 national budget on Tuesday at a virtual press conference.
Implementation of proposals would prevent premature deaths of nearly 390,000 current adults and 400,000 current youth, they said.
In addition, supplementary duty, health development surcharge and VAT on cigarettes would also earn the government Tk34 billion in additional revenues, the organisations claim.
Economist and the convener of the National Anti-Tobacco Platform Dr. Qazi Kholiquzzaman Ahmad, Chairman of Bangladesh Sangbad Sangstha (BSS) and former Vice-Chancellor of Dhaka University Professor Dr. A A M S Arefin Siddique, Senior Research Fellow of the Bangladesh Institute of Development Studies (BIDS) Dr. Naznin Ahmed, Research Director of Bangladesh Institute of International and Strategic Studies (BIISS) Dr. Mahfuz Kabir and Lead Policy Advisor for Campaign for Tobacco-Free Kids (CTFK), Bangladesh Md. Mostafizur Rahman endorsed the proposals at the briefing.
The proposals include:
1. Introduce a tiered specific excise (supplementary duty -SD) with uniform tax burden (SD share of 65% of final retail price) across all cigarette brands; in the low-tier, the retail price should be set at 50 for 10 sticks, followed by BDT 32.50 as specific supplementary duty (SD). In the medium-tier, set the retail price at BDT 70 for 10 sticks and BDT 45.50 should be imposed as specific supplementary duty (SD). In the high-tier, the retail price should be set at 110for 10 sticks, followed by BDT 71.50 as specific supplementary duty (SD). In the premium-tier, set the retail price at BDT 140 for 10 sticks and BDT 91 should be imposed as specific supplementary duty (SD).
2. Reduce price tiers from four to two in the medium-term (2021-22 to 2025-26) by reducing the gaps in final prices and tax rates between cigarettes brands
3. For 25 non-filtered bidi sticks, the retail price should be BDT 25, followed by a specific supplementary duty of BDT 11.25. The price for 20 filtered sticks should be BDT 20, which will be followed by a specific supplementary duty of BDT 9. As a result of such measures, in both filtered and non-filtered bidis, the specific supplementary duty will be 45 percent of final retail prices.
4. For SLT products, the price per 10-gram jarda and gul should be BDT 45 and 25 respectively. A specific supplementary duty of BDT 27 should be imposed on per 10-gram jarda. For gul, the specific supplementary duty should be BDT 15. As a result of such measures, in both jarda and gul, the specific supplementary duty will be 60 percent of final retail prices.
5. Retain the existing 15% Value Added Tax (VAT) and 1% Heath Development Surcharge on all tobacco products.
With the ongoing second wave of covid-19 pandemic, the health sector and overall economy of the country are going through precarious condition. If the tobacco use goes unchecked during such period of vulnerabilities, it would put additional risk for public health.
According to World Health Organization (WHO), smokers are more likely to become severely ill when infected with covid-19. This makes the existing tobacco users, around 40 million in number, extremely vulnerable to severe covid-19 infection.
In Bangladesh, tobacco use claims 126,000 lives prematurely each year.
In a 2019 study titled “Economic Cost of Tobacco Use in Bangladesh: A Health Cost Approach”, it was revealed that in 2017-18, the economic cost (medical expenses and loss of productivity) of tobacco use stood at Tk30,560 crore while revenues from tobacco sector in 2017-18 FY was only Tk22,810 crore.
Implementation of the above-mentioned proposals for tax and price hike of tobacco products will encourage 1.1 million people to quit smoking, prevent premature deaths of 390,000 current adults and 400,000 current youth, and earn Tk3,400 crore as additional revenue from the supplementary duty, health development surcharge and VAT imposed on cigarettes.
At the same time, price hike of bidi, jarda and gul would also discourage the use among the poorest and most vulnerable demographic while contributing to govt. exchequer.
The existing multi-tiered ad-valorem taxation has rendered cigarettes quite cheap and affordable in Bangladesh. Following price hike, consumers conveniently switch to cheaper brands instead of quitting.
According to Global Adult Tobacco Survey (GATS), 2017, between 2009 and 2017, there has been a 1.5 million increase in the number of cigarette users.
The event was hosted by Nadira Kiron, Co-convener, ATMA. The budget proposals were presented by Md. Hasan Shahriar, Project Head, Tobacco Control, PROGGA. Among those present were also Mortuza Haider Liton, Convener, ATMA, ABM Zubair, Executive Director, PROGGA and representatives of anti-tobacco organizations and media outlets.
