Increase tobacco products' prices through specific taxes: Atma demands

  Anti-Tobacco Media Alliance (Atma) urged National Board of Revenue (NBR) to set the price of 10 sticks of low-tier cigarettes at Tk50 and to hike prices of all tobacco products by imposing specific taxes.

The demands were raised during a FY2022-23 pre-budget meeting between Atma delegates and NB held Wednesday (16 February).

The pre-budget meeting was presided by NBR Chairman Abu Hena Md Rahmatul Muneem, reads a press release.

Atma delegates informed at the meeting that the implementation of their proposed tobacco price and tax measures would save the lives of more than 445,000 current adults and nearly 448,000 youth from premature deaths and additionally earn Tk 9,200 crore in revenues.

In the discussion, the NBR chairman said, "We are aware of the massive healthcare cost incurred by tobacco use. Although taxation and price increase involve a number of other factors, we want to see tobacco use decreasing. Revenues can come from other sources. So, we will try to accommodate proposals presented by Atma based on all circumstantial factors involved". 

In the pre-budget meeting, NBR officials were present along with Atma representatives that include Shahnaz Munni, chief news editor of News24,; Monir Hossain Liton, joint chief news editor of Ekattor Television; Mortuza Haider Liton, chief crime correspondent of bdnews24.com and convenor, Atma; Nadira Kiron, news editor, ATN Bangla and co-convener, Atma;  and Mizan Chowdhury, senior reporter, Daily Jugantor and co-convener, Atma.

The recent years have barely seen any decline in the prevalence of cigarette use.

Owing to the extremely low tax base and tax rates, tobacco products of all types, i.e. cigarettes, bidis and smokeless tobacco items (jarda and gul) have remained highly affordable.

The existing tobacco tax structure is highly complex and incapable of doing enough to discourage the use of tobacco products. As a result, the current tobacco tax structure fails to contribute, as it is supposed to, to the achievement of a tobacco-free Bangladesh, as declared by Prime Minister Sheikh Hasina.

According to GATS 2017, 37.8 million adults (15 y/o and above) in Bangladesh use tobacco (smoke and smokeless), the release added.

Tobacco is responsible for around 161,000 deaths a year in Bangladesh. In FY2017-18 alone, tobacco incurred a financial loss (from medical expenses and loss of productivity) of more than Tk30,560 crore.

Increasing tobacco prices and taxes is safeguarding public health since such move discourages the youth from developing the habit of tobacco use and also effectively encourages the current users, particularly the poor, to quit.

In the discussion, Atma presented following proposals to be realised in the upcoming budget for FY2022-23:

Budget Proposals:

1. Introduce a tiered specific excise (SD) with uniform tax burden (excise share of 65% of final retail price) across all cigarette brands

- In the low-tier, the retail price should be set at Tk50 for 10 sticks, followed by Tk32.50 as specific supplementary duty (SD). 

- In the medium-tier, set the retail price at Tk75 for 10 sticks and Tk48.75 should be imposed as specific supplementary duty (SD). 

- In the high-tier, the retail price should be set at Tk120 10 sticks, followed by Tk78 as specific supplementary duty (SD). 

- In the premium-tier, set the retail price at Tk150 for 10 sticks and Tk97.50 should be imposed as specific supplementary duty (SD). 

2. Impose specific excise (SD) with uniform tax burden (excise share of 45% of final retail price) across all bidi brands (filtered and non-filtered).

- In non-filtered bidis, set the retail price at Tk25 for 25 sticks and add Tk11.25 as specific supplementary duty (SD). 

- In filtered bidis, set the retail price at Tk20 for 20 sticks and add Tk9.00 as specific supplementary duty (SD).

3. Increase prices of smokeless tobacco products (Jarda, Gul) by imposing specific excise (SD). 

- The price per 10-gram jarda should be Tk45 and impose Tk27.00 as specific supplementary duty (SD).

- The price per 10-gram gul should be Tk25 and impose Tk15.00 as specific supplementary duty (SD).  

4. Retain the existing 15% Value Added Tax (VAT) and 1% Heath Development Surcharge on all tobacco products.

Implementation of the above-mentioned proposals for tax and price hike of tobacco products will encourage 1.3 million people to quit smoking, save the lives of more than 445,000 current adults and nearly 448,000 youth from premature deaths and additionally earn Tk9,200 crore in revenues for the government.

Atma has urged the NBR to implement the proposals as a step towards building a tobacco-free Bangladesh by 2040.