Development coordination urges increased tobacco taxes

Excessive smoking poses a significant threat to public health in Bangladesh, with approximately 350 individuals succumbing to smoking-related causes daily. The economic toll is also substantial, with tobacco-related diseases and premature deaths resulting in a yearly financial loss of Tk 30,570 crore. Despite sustained government efforts to curb smoking, the desired outcomes have yet to materialize.

During a pre-budget press conference, the esteemed think-tank 'Unnayan Shamunnay' suggested that one of the most effective strategies to diminish cigarette consumption is by enforcing an increase in its retail price. This measure aims to restrict the availability of cigarettes by making them less affordable. By rendering cigarettes financially inaccessible to many, this approach seeks to alleviate addiction and reduce smoking prevalence in the population.

In Bangladesh, despite incremental yearly increases in cigarette prices, their accessibility persists due to inflation and growth in per capita income. Against this backdrop, various anti-tobacco civic organisations and both local and foreign researchers have proposed a significant hike in cigarette prices for the upcoming financial year 2024-25.

If this proposal is enacted, it is projected that the rate of cigarette consumption will drop from 15.1 percent to 13.8 percent. Additionally, the amount of tax revenue generated from cigarette sales is expected to rise by 28 percent compared to the previous fiscal year, resulting in approximately Tk 10,000 crore in additional tax revenue.

These findings were unveiled during a press conference titled 'Proposals to be Implemented on Cigarettes in the Budget of Fiscal Year 2024-25', held at the Jahur Hossain Chowdhury Hall of the Jatiya Press Club in Dhaka today, Sunday, March 10th.

Dhaka University's Emeritus Professor and former Governor of Bangladesh Bank, Dr. Atiur Rahman, led a supplementary discussion alongside five distinguished economists from Bangladesh Economists for Effective Tobacco Taxation (BEETC), a forum comprising anti-tobacco economists. The panel included Dr. Rumana Haque, Professor of Economics at the University of Dhaka; Golam Ahmed Farooqui, Dean of the Faculty of Business and Management at UCSI University; Homaira Ahmed, Research Associate at BIDS (Bangladesh Institute of Development Studies); and Dr. Nazmul Islam, Associate Professor of Economics at BUET (Bangladesh University of Engineering and Technology).

Dr. Atiur Rahman highlighted that low-grade cigarettes are readily accessible, particularly among individuals from lower-income backgrounds and teenagers. Consequently, it's proposed to implement the highest percentage increase (33 percent) in the retail prices of these cigarettes in the upcoming financial year. Additionally, the supplementary duty on this category of cigarettes is suggested to be elevated from 58 percent to 63 percent.

Moreover, there are proposals to raise the retail prices of middle, high, and premium level cigarettes by 19 percent, 15 percent, and 13 percent respectively. Even if the supplementary duty rate for these categories remains at 65 percent, the proposed increase in retail prices will lead to a significant rise in tax revenue generated from the sale of these cigarettes.

During the question-and-answer session, journalists raised concerns about reducing the number of smokers without resorting to the closure of cigarette factories and by legalising the sale of cigarettes in all areas.

In response to this inquiry, Rumana Haque emphasised that the government, in response to the anti-smoking movement, has refrained from permitting the establishment of new cigarette manufacturing factories. Furthermore, smoking and the sale of cigarettes in public places are prohibited by law. However, Haque noted that enforcement of these laws is lacking. She underscored the necessity for proper enforcement of anti-smoking regulations to effectively combat smoking prevalence.

Prime Minister Sheikh Hasina has set a bold vision of achieving a smoke-free Bangladesh by 2040, a goal that has rallied numerous organisations to join the anti-smoking movement. Among these is Development Coordination, a leading research institute in the country dedicated to advancing initiatives aimed at curbing smoking prevalence and fostering a healthier society.