Speakers: Impose specific tax on tobacco products

The current tobacco tax structure is extremely complex and a major obstacle for discouraging tobacco usage, and this needs to be simplified, said experts at a virtual meeting on Monday.

The meeting was titled " Way Forward to Tobacco free Bangladesh by 2040: Tobacco Tax", organized by Dhaka Ahsania Mission (DAM) and the Economic Reporters Forum (ERF.)

Speakers also said that in Bangladesh, the price of cigarettes is very low, while bidi is even cheaper.

According to the Bangladesh Bureau of Statistics, the per capita national income (nominal) has increased by 25.4% in 2017-18 as compared to 2015-16. However, the price of most cigarettes has remained almost unchanged or has increased slightly. As a result, cigarettes are becoming more readily available, they opined.

That is why, it is important to increase the price of cigarettes in a proper way, that is, through a specific tax increase.

Shariful Islam, project coordinator, tobacco control project, Dhaka Ahsania Mission, said in his keynote speech that the proposal for cigarettes in the financial year 2021-2022 was to introduce a specific excise (supplementary) duty based on the price level of all cigarette brands with uniform coverage (supplementary duty 65% of final retail price).

In the low-tier, the retail price should be set Tk50 for 10 sticks, followed by Tk32.50 as specific supplementary duty (SD); In the medium-tier set the retail price at Tk70 for 10 sticks and Tk45.50 should be imposed as SD;  In the high-tier, the retail price should be set at Tk110 for 10 sticks, followed by Tk71.50 as SD; and in the premium tier, set the retail price at Tk140 for 10 sticks and BDT 91 should be imposed as SD.

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In the medium term (2021-22 to 2025-26), the price and tax gap between cigarette brands will be reduced from 4 to 2.

Iqbal Masud, director, health and WASH sector, Dhaka Ahsania Mission, said that tobacco is linked to six of the eight leading causes of preventable death worldwide.

"In Bangladesh, more than 161,000 people die every year from diseases caused by tobacco usage. But we are not as much concerned about it as we should be," he also said.

During the meeting, experts recommended reducing the easy availability of tobacco products, and increasing specific supplementary tariffs regularly in line with inflation and income growth.

To simplify the taxation process, the existing divisions/variety/tiers between tobacco products need to be removed, they also said.

All smokeless tobacco products should be brought under the tax net. To formulate and implement a simple and effective tobacco tax policy (for a period of 5 years) which will contribute to the reduction of tobacco usage and increase in revenue and the re-imposition of 25% export duty on tobacco products, speakers added.