Progga, Atma propose specific taxes on tobacco products

Research and advocacy organisation Progga and Anti-Tobacco Media Alliance (ATMA) have called for imposing specific taxes on cigarettes and other tobacco products in the upcoming budget for the 2021–2022 fiscal in order to raise prices of the harmful items.

In a virtual press conference on Tuesday, the two organisations unveiled their proposals that include bringing smokeless tobacco growers under the tax net, formulation and implementation of a five-year tobacco tax policy to reduce tobacco use and increase revenue and restoration of 25% export duty on tobacco products.

The organisations believe that the implementation of the proposals will encourage 11 lakh people to quit smoking.

The proposal also urged to retain the existing 15% value-added tax (VAT) and 1% heath development surcharge on all tobacco products.

In a keynote paper, Md Hasan Shahriar, project head of Tobacco Control at Progga, said the supplementary duty, health development surcharge, and VAT on cigarettes would also earn the government Tk34,000 crore in additional revenues.

At the same time, the price hike of bidi, jarda and gul would discourage the use among the poorest and most vulnerable people.

The organisations claimed that the existing multi-tiered ad-valorem taxation has rendered cigarettes quite cheap and affordable in Bangladesh so, following the price hike, consumers conveniently switch to cheaper brands instead of quitting.

Additionally, with the ongoing second wave of the covid-19 pandemic, the health sector and overall economy of the country are going through precarious conditions. If tobacco use goes unchecked during such a period of vulnerability, it would put an additional risk for public health.

According to the World Health Organisation (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.

At the press conference, Eminent Economist and Convener of the National Anti-Tobacco Platform Dr Qazi Kholiquzzaman Ahmad said, "I fully support the budget proposals to increase tobacco taxes and prices. The government must look for the welfare of the people, as dictated in our Constitution."

Professor Dr AAMS Arefin Siddique, a former vice-chancellor of the University of Dhaka, said, "To hike tobacco taxes and prices, we can always follow the precedents set by neighbouring Sri Lanka. We can progress through learning from each other. We also need to educate the youth on the detrimental effects of tobacco."

Senior Research Fellow of the Bangladesh Institute of Development Studies (BIDS) and economist Dr Naznin Ahmed said, "Taxes at a specific rate should be imposed on tobacco. It will benefit the government".

"The covid-19 pandemic has created an opportunity for broader tobacco control. To utilize this, we need to make the harmful effects of tobacco widely known," she added.  

Dr Mahfuz Kabir, research director of the Bangladesh Institute of International and Strategic Studies (BIISS), said, "Our tobacco taxation structure requires fundamental reform. With that end in mind, specific supplementary duty needs to be introduced. The implementation of taxation and price-related budget proposals, particularly in the low-tier cigarette brands, would significantly increase revenues and lower the health risk of poor demographic because 72% of cigarette smokers are users of low-tier brands."

Md Mostafizur Rahman, lead policy advisor for Campaign for Tobacco-Free Kids (CTFK), Bangladesh, said, "We hope, the National Board of Revenue (NBR) will adopt the proposals. It will increase the government earnings, reduce existing tobacco use and also discourage the young from initiating."

Hosted by Nadira Kiron, co-convener of Atma, Mortuza Haider Liton, convener of Atma, ABM Zubair, executive director of Progga, among others attended the programme.

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 the fiscal year 2017-18, the economic cost (medical expenses and loss of productivity) of tobacco use stood at Tk30,560 crore while revenues from the tobacco sector in the fiscal year 2017-18 were only Tk22,810 crore.