What Bangladesh can learn from Global Initiatives?

Tobacco consumption poses a substantial public health challenge, contributing to 1.6 million deaths annually in the European Region alone. This global issue resonates deeply in Bangladesh, where approximately 1.62 lakh people die each year from tobacco-related diseases. It resulted in a significant financial burden of Tk30,560 crore in FY18 due to medical expenses and loss of productivity. In combating this epidemic, increasing taxes on tobacco products stands out as a vital strategy.

The World Health Organization (WHO) highlights the compelling benefits of raising tobacco taxes. A 50 percent increase in excise taxes on cigarette packs worldwide could lead to 49 million fewer smokers and avert at least 11 million tobacco-related deaths. Notably, countries such as Australia, Lithuania, Nicaragua, and Vanuatu have successfully increased their taxes to best-practice levels, showcasing tangible progress in reducing tobacco consumption.

Despite these successes, challenges persist, particularly in the WHO European Region. While 26 of the 53 countries have achieved the recommended 75 percent tax share on the retail price of tobacco, inconsistencies remain, with the Commonwealth of Independent States (CIS) showing slower progress. The primary hurdles include price disparities within and between countries and emphasize the need for coordinated efforts among different ministries and neighboring nations.

The case of Bangladesh provides a pertinent example of the intricate relationship between tax measures and tobacco consumption. A 12.5 percent increase was proposed in the national budget of FY24 for low-tier cigarettes, compared to the recommended 37.5 percent, which hardly qualifies as a "bold" move. Experts predict a minimal decline in cigarette sales and a mere 0.53 percentage point drop in smoking prevalence – a far cry from the 1.28 percent decrease achievable with the recommended taxes.

However, a global perspective reveals that only 12 percent of the world's population, residing in 41 countries, benefits from tax rates at 75 percent or more of the price of the most popular cigarette brand. Australia stands out with an impressive 89.4 percent tax share on cigarettes, resulting in a dramatic decline in smoking rates from 22.1% in 1991 to 10.6% in 2017. Similarly, over a decade, Thailand's phased tax increase led to a remarkable 70 percent reduction in cigarette consumption among adolescents These success stories underscore the transformative impact of robust tobacco taxation.

Furthermore, Peru has become a global leader in tobacco taxation. Since the 1990s, Peru has evolved its tobacco tax policies, notably in 2010 by introducing a specific excise component and, in 2016, achieving a historic 150 percent increase in the specific excise tax. Recognized by the WHO for its contributions to tobacco control, Peru continues to strengthen its policies, with a current 73.3% total tax share.

Unfortunately, Bangladesh's proposed tax rates are lower than the recommendations, potentially hindering the progress made in smoking prevalence reduction. As Bangladesh navigates its own challenges, it can draw valuable lessons from these countries, emphasizing the need for more substantial tax rate increases to align with international best practices and effectively curb tobacco consumption.

Tobacco taxation stands out as a cost-effective "best-buy" intervention to curb tobacco use globally. The evidence underscores its significant impact on reducing smoking prevalence and saving lives. As countries strive to implement effective tax measures, Bangladesh has a valuable opportunity to reassess its approach and align with international best practices. It should aim for the WHO-recommended 75% tax share on tobacco products. This bold step will send a clear message of commitment to public health and economic well-being. Besides, the tax structure needs to be simplified by moving away from the complex four-tiered system to a transparent, single-tier specific tax system based on pack price. This simplifies administration and ensures fairer pricing across brands. It is also important to educate the public about the benefits of tax hikes – both for health and the economy. Through building a broad coalition of support from health professionals, civil society organizations, and even the business community to counter the tobacco industry's lobbying efforts, it might be possible to become a "Tobacco-Free Bangladesh" by 2040.

By prioritizing tax efficiency, the Bangladeshi government can not only achieve public health goals but also address budgetary concerns and promote overall well-being. Policymakers must act decisively to embrace evidence-based tax measures, paving the way for a healthier and tobacco-free future.

Author: Public policy researcher