Revenue to increase Tk10,000cr, 11 lakh untimely deaths to be prevented

Hiking prices of tobacco products through effective taxation will not only increase the government's revenue earnings but also reduce the prevalence of tobacco use and thereby, the government's healthcare cost attributable to tobacco-induced diseases, said speakers at a workshop.

They strongly urged the government to increase the prices of tobacco products particularly the price and tax rate of low-tier cigarettes in the upcoming national budget for FY 2024-25, to push these products out of the purchasing capacity of the youth and the poor.

The workshop, titled "Tobacco Tax and Price Measures: National Budget FY 2024-25", was jointly organized for journalists by PROGGA (Knowledge for Progress) and ATMA (Anti-Tobacco Media Alliance) at the BMA Bhaban in the capital today (3 April). A total of 27 journalists from print, television, and online media outlets participated in the workshop, says a press release.

At the workshop, it was informed that the prices of all types of tobacco products in Bangladesh are already considerably low. Compared to the prices of essential commodities, it is evident that these deadly products are getting even cheaper. An analysis of the average retail prices of essential commodities in seven metropolitan cities of the country (Dhaka, Chattogram, Rajshahi, Khulna, Sylhet, Barisal, and Rangpur) between July 4, 2021 and July 4, 2023, as reported by the Department of Agricultural Marketing (DAM), shows that price of loose sugar has seen an 89 percent hike in this period, the hike is 87 percent for potatoes, 75 percent for loose flour, 47 percent for pangash fish, 43 percent for eggs, 34 percent for soybean oil, 30 percent for powdered milk, and 27 percent for broiler chicken. However, during this same timeframe, the hike in the prices of different tiers of cigarettes ranged between 6-15 percent only.

It should be noted that the low-tier cigarettes constitute 75 percent of the total cigarette market of Bangladesh. The supplementary duty imposed on this tier is merely 58 percent. It is, therefore, quite evident that compared to other cigarette tiers, hiking prices and supplementary duty of low-tier cigarettes will encourage a much larger number of low-income tobacco users to quit.

The tobacco prices and taxation proposals presented during the workshop are as follows:
The retail price of low-tier cigarettes should be increased to Tk 60 for 10 sticks from the existing Tk 45, followed by a 63 percent supplementary duty. The prices of 10 sticks should be set at Tk 80, Tk 130 and Tk 170 respectively for medium, high, and premium tiers, followed by the existing 65 percent supplementary duty on these three tiers.

For non-filtered bidis, the retail price should be Tk 25 for 25 sticks. In the case of filtered bidis, the retail price for 20 sticks should be set at Tk 20. Both prices should be followed by a 45 percent supplementary duty. Regarding smokeless tobacco, the retail price for 10 grams of jarda and gul should be Tk 55 and BDT 30, followed by 60 percent supplementary duty. The budget proposals also suggest continuing the existing 15 percent VAT and 1 percent health development surcharge (HDS) on the retail prices of tobacco products.

It was also informed that the implementation of the above-mentioned budget proposals by anti-tobacco organizations would generate Tk 10,000 crore as additional revenue which could greatly contribute to tackling the existing financial crisis. Additionally, the proposals, in the long run, will also help prevent the premature deaths of 1.1 million Bangladeshis, including nearly half a million youths.

Dr Syed Mahfuzul Huq, National Professional Officer, World Health Organization (WHO) Bangladesh and Hasan Shahriar, Project Head, Tobacco Control, PROGGA, delivered the keynote presentation before journalists. Among the discussants were Md Abdus Salam, Programme Manager (Bangladesh) for Campaign for Tobacco-Free Kids (CTFK), Liton Haider, Convener of ATMA, Mizan Chowdhury, Co-Convener of ATMA, and ABM Zubair, Executive Director, PROGGA.

It should be noted that 37.8 million adults in Bangladesh use tobacco products (smoked and smokeless). Tobacco claims 161,000 lives every year in Bangladesh. In 2017-18, the toll of tobacco use in the national economy (due to medical expenses and loss of productivity) stood at BDT 30,560 crore while the revenue generated from the tobacco sector stands at only BDT 22,810 crore. Hiking prices of tobacco products discourage the youth from getting hooked on tobacco addiction and encourages existing, particularly the low-income demographic, to quit.