The National Board of Revenue (NBR) chairman has said tobacco taxes will be raised in the national budget for 2018-19. Md Mosharraf Hossain Bhuiyan made the promise on Sunday when a group of journalists tied with Anti-Tobacco Media Alliance or ATMA demanded that higher taxes be levied on tobacco products.
He acknowledged the health hazards posed by tobacco products and said people must pay taxes to consume such products.
But, Bhuiyan said they would increase the taxes in a “logical” way and that they were under pressure not to increase taxes on cheaper cigarettes.
The proposals include bringing the number of price slabs down to two – low and high. The journalists asked that the differential tax between local and multi-national corporation brands in the lowest tax tier be eliminated.
Proposals have also been made to combine the high and premium tiers under a single tier (high), setting the minimum price for the low tier at no less than Tk 50 per 10 sticks and raising the ad valorem tax to 60 percent.
Similarly, they aksed that the minimum price for the high tier (high and premium) be set at a minimum Tk 100 per 10 sticks and the ad valorem tax on the high tier be kept at the existing 65 percent.
At the same time, the media activists demanded that the authorities introduce a specific tax of Tk 5 per 10 sticks for all cigarettes.
They also proposed elimination of the distinction between filter and non-filter bidis and setting the minimum price for 25 bidis at Tk 30.
The ad valorem tax sould be raised to 45 percent of the price and a specific tax of Tk 6 per pack of 25 sticks be added.
They further demanded the elimination of ex-factory price in smokeless tobacco (Jarda and Gul) by changing the tax base to the retail price, fixing a minimum retail price of Tk 50 per 20 grams, raising the ad valorem tax to 45 percent of price and adding a specific tax of Tk10 per 20g, they demanded.
A 15 percent VAT on retail price will still be applicable to all tobacco products for both smoking and smokeless tobacco.
The media activists who are guided by the anti-tobacco experts argued that if those proposals are adopted, it will encourage nearly 6.42 million current adult smokers to quit – 3.07 million cigarettes smokers and 3.35 million bidi smokers.
This will also reduce the prevalence of cigarette smoking by 2.7 percent and the prevalence of bidi smoking by 2.9 percent. It will reduce premature deaths by 2.01 million among current smokers in the long-term – 1.08 million cigarette smokers and 938,650 bidi smokers.
The new taxation plan would also raise between Tk 75 billion and Tk 100 billion (or 0.4 percent of GDP) in additional tax revenue, acoording to them.
This additional revenue can be used to fund several new or existing programmes to reduce the harms of tobacco use and promote healthy lives, they said.
Higher tax on tobacco is known as the single most effective intervention to lower smoking rates and to deter future smokers. Industry lobbies globally remain active to prevent tax hikes.
Senior journalists Mortuza Haider Liton, Shahnaj Munni, Nadia Kiron, Daulat Akhter Mala, Mijanur Rahman, and Md Jashim Uddin were present, among others, during the meeting with the NBR chairman.
