Tax measures in new budget to escalate tobacco use: Experts

The proposed national budget for FY 2023-24, if adopted, will once again render tobacco products cheaper than essential commodities, experts have said. 

This will raise tobacco-related illness and deaths, deprive the government of the opportunity to earn additional revenue, and only benefit tobacco companies, they said at a post-budget press conference on tobacco price and tax measures, at the National Press Club on Monday.

The event was jointly organised by research and advocacy organisation PROGGA (Knowledge for Progress) and Anti-tobacco Media Alliance (ATMA). 

Economists and anti-tobacco leaders have raised demand for introducing specific supplementary duty (SD) to effectively raise the prices of tobacco products in the final budget.

According to PROGGA and ATMA, the increase in prices of 10 sticks cigarettes ranges from 1.8% to 12.5%. However, according to the government reports, the year-on-year increase in the prices of loose wheat flour [atta], broiler chicken, sugar, eggs, powder milk, and red lentil ranges from 14.5% to 71.7%. As a result, tobacco products will become much cheaper compared to other essential commodities, which will encourage people to get hooked on smoking, and thus threatening public health.

The proposed budget has not raised the prices of bidi. This is the fourth consecutive time the budget has kept the retail price of bidi unchanged and the seventh consecutive time not to raise the supplementary duty (SD) imposed on bidi. The prices of per gram jarda and gul have been raised by 50 paisa and 30 paisa respectively and the SDs have been kept unchanged, said a press release.

The proposed budget raised retail prices of tobacco products without increasing the SD imposed on those products. This will only increase the profits of tobacco companies but deprive the government of the opportunity to earn additional revenue. 

As per the proposals of anti-tobacco organisations, only by introducing 65% of SD in the low-tier cigarettes, the government can earn at least Tk17 billion as additional revenue. As the proposed budget has set the SD on the low-tier of cigarettes at only 58%, the companies will pocket at least Tk4.86 billion as additional profit.
 
Addressing as the chief guest, eminent economist and convener of the National Anti-Tobacco Platform, Qazi Kholiquzzaman Ahmad said, "The budget does not reflect any of the proposals that we have put forth regarding a reform of the tobacco tax structure. We strongly demand that the government incorporate such proposals in the final budget to safeguard public health."

To make the country tobacco-free, the government must first sell all its shares in the British American Tobacco company, which is around 6%, he mentioned.

Mahfuz Kabir, research director of Bangladesh Institute of International and Strategic Studies (BIISS), said, "There is an ample opportunity to raise additional revenue by hiking the SD on the low tier of cigarettes to 65%. The proposed budget has replaced the ad-valorem system with specific taxes on petroleum products, which should also be followed in case of tobacco products to benefit both the economy and public health."

Anti-tobacco leaders said that in the finalised budget, the retail price of the low-tier cigarettes should be set at Tk55 for 10 sticks, followed by Tk35.75 as specific supplementary duty [SD], medium-tier of cigarettes at Tk70, [Tk45.50 SD], high-tier ones at Tk120 [Tk78 SD], and premium tier ones at Tk150 [Tk97.50 SD].

The retail price of non-filtered bidis should be Tk25 for 25 sticks, followed by Tk11.25 as a specific supplementary duty, and the filtered ones at Tk20, followed by Tk9 as a specific supplementary duty, they recommended.

For 10 grams of jarda, a specific supplementary duty of Tk27 was proposed while retaining the retail price at Tk45 as per the proposed budget and for 10 grams of gul, the retail price should be Tk25 and supplemented by Tk15 as a specific supplementary duty.

It was informed that the implementation of the abovementioned proposals will raise Tk9,600 crores in additional revenues and prevent the premature deaths of 4.88 lakh adults and 4.92 lakh youths.

The discussants in the event include Syed Yusuf Sadat, research fellow of Centre for Policy Dialogue (CPD); Mortuza Haider Liton, convener of ATMA; Md Abdus Salam, programme manager of Campaign for Tobacco-free Kids (CTFK) Bangladesh; Md Hasan Shahriar, head of tobacco control at PROGGA; ABM Zubair, executive director of PROGGA, and leaders of different anti-tobacco organisations.