PROGGA, ATMA for imposing specific taxes on tobacco products

Publish: 7:02 PM, April 27, 2021 | Update: 7:02:PM, April 27, 2021

DHAKA,  – Research and Advocacy Organization PROGGA (Knowledge for Progress) and Anti-Tobacco Media Alliance (ATMA) have voiced demands for increasing prices of cigarettes and other tobacco products through imposing specific taxes.

In a press conference held virtually today, the two organizations unveiled their proposals regarding tobacco taxes and prices in the budget for next fiscal year (FY22).

Implementation of proposals would prevent premature deaths of nearly 390,000 current adults and 400,000 current youth. In addition, supplementary duty, health development surcharge and VAT on cigarettes would also earn the government Taka 34 billion in additional revenues, the organizations claim, said a press release.

During the press conference, eminent economist and the 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 welfare for the people, as dictated in our Constitution.”

Professor Dr. A A M S Arefin Siddique, Chairman of Bangladesh Sangbad Sangstha (BSS) and former Vice-Chancellor of Dhaka University, said, “To hike tobacco taxes and prices, we can always follow the precedents set by neighboring 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.”

The Research Director of Bangladesh Institute of International and Strategic Studies (BIISS), Dr. Mahfuz Kabir said, “Our tobacco taxation structure requires a fundamental reform. With that end in mind, specific supplementary duty needs to be introduced.”

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.”

The event was hosted by Nadira Kiron, Co-convener, ATMA. The budget proposals were presented by Md. Hasan Shahriar, Project Head, Tobacco Control, PROGGA. Mortuza Haider Liton, Convener, ATMA, ABM Zubair, Executive Director, PROGGA and representatives of anti-tobacco organizations and media outlets were present, among others.

The release said the budget proposals include introducing a tiered specific excise (supplementary duty -SD) with uniform tax burden (SD share of 65% of final retail price) across all cigarette brands, reducing 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.

Besides, they also proposed for retaining the existing 15% Value Added Tax (VAT) and 1% Heath Development Surcharge on all tobacco products.

The release said 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 Taka 3400 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 the government exchequer.

The release also said raising prices of tobacco products would discourage the youth from starting use and getting addicted while encouraging the existing users belonging to the poor demographic to quit.