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Bangladesh improves in int’l cigarette tax index

  • Published at 04:10 pm December 19th, 2020
NBR estimates Tk7,000cr in extra revenues from cigarette price hikes
File photo Syed Zakir Hossain/Dhaka Tribune

The Cigarette Tax Scorecard has been created by the University of Illinois Chicago’s (UIC) Institute for Health Research and Policy

Bangladesh has improved its rankings in an international cigarette tax index, attaining a position slightly higher than the global average.

Bangladesh attained an overall score of 2.38 out of 5 possible points, which is slightly higher than the global average (2.07), said the first edition of the International Cigarette Tax Scorecard released by US-based research initiative Tobacconomics.

The Tobacconomics Scorecard assesses countries’ cigarette tax policies based on international best practices using data from the World Health Organization from 2014-2018. Nearly half the countries scored less than two out of the five-point maximum, says a press statement.

Bangladesh had significantly improved its score on cigarette taxation policy from 0.87 in 2014 to 2.38 in 2018, but improvements are needed in the tax structure and prices of cigarettes, the index said.

The Cigarette Tax Scorecard has been created by the University of Illinois Chicago’s (UIC) Institute for Health Research and Policy.

“The scorecard shows considerable untapped potential for cigarette tax increases to raise revenue for a Covid-19 recovery and importantly, prevent premature deaths and promote a healthy and productive workforce,” said Tobacconomics Director Frank J Chaloupka, who is also the lead author of the scorecard.

About 126,000 people die every year in Bangladesh from tobacco use and the economic burden from tobacco use amounted to Tk30,500 crores in 2017-18, which is 1.4% of Bangladesh’s total GDP, the statement said.

“The complex tiered cigarette tax structure in Bangladesh has significantly contributed to a reduced score for Bangladesh in this scorecard. Bangladesh must reduce the number of tiers for the purpose of cigarette taxation, introduce specific excise taxes and significantly increase its existing excise taxes on all tobacco products to save lives and raise much needed revenue,” according to Dr Qazi Kholiquzzaman Ahmad, eminent economist and the convener of National Anti-Tobacco Platform.

“According to the World Health Organization (WHO), lungs hooked on tobacco are at greater risk of Covid-19. In Bangladesh, 37.8 million adults use tobacco and 41 million people fall victim to second-hand smoke in their own homes. This huge chunk of population, victims of direct or indirect tobacco use, are currently at grave risk of severe coronavirus infection. Low prices of tobacco products are the main reason behind this,” Dr Mahfuz Kabir, research director of Bangladesh Institute of International and Strategic Studies (BIISS).

Mentioning that reforming tobacco taxes provides a quick and easy way for Bangladesh to raise much needed revenue for economic recovery, the scorecard also proposed a uniform specific excise tax that comprises at least 75% of the retail price and is automatically updated to stay ahead of inflation and income growth.

“Increased taxes on tobacco products will reduce their consumption and generate much needed revenue to bear coronavirus related medical expenses and implementation of government stimulus packages,” Dr Mahfuz added.

The top performing countries on the scorecard are Australia and New Zealand, which reflects their high, uniform specific cigarette excise taxes with regular increases that have significantly reduced the affordability of cigarettes.

Tobacconomics is based at the University of Illinois at Chicago's Institute for Health Research and Policy and it conducts economic research to inform and shape fiscal policies for health globally.

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