PROGGA, the anti-tobacco platform, has proposed that all types of smokeless tobacco products be brought under the government's tax net in the upcoming budget for 2021-22 fiscal.
The organization recommended a good number of suggestions at a webinar Tuesday to reduce the consumption of tobacco products in the country, with the aim to realise a tobacco-free Bangladesh by 2040.
Raising tobacco taxes would encourage nearly 1.1 million adults to abstain from smoking and deter more than 800,000 youth from smoking initiation and save the lives of nearly 390,000 current adults and 400,000 current youth from premature death.
That is all before we even get to the Tk300 billion in tax revenue that it would generate for the government's coffers.
The current tobacco tax structure in Bangladesh is complex and inadequate to discourage tobacco use. So, raising taxes in Bangladesh would save lives while increasing government revenue.
Progga’s recommendations are:
- Introducing a tiered specific excise with uniform tax burden (excise share of 65% of final retail price) across all cigarette brands;
- Reducing price tiers from four to two in the medium-term by reducing the gaps in final prices and tax rates between cigarettes brands;
- cutting down the prevalence of cigarette smoking from 15.1% to 14.1%;
- Increasing cigarette prices more at the LOW tier will help relatively lower income smokers in the LOW tier to quit and at the same time limit the ability of smokers to substitute to cheaper brands when prices increase in the higher price tiers. Jacking up prices of bidi and SLTs will discourage the use of such products among low-income people and significantly increase the revenues for the government.
Other Recommendations are:
- To reduce affordability of tobacco, increase specific supplementary duty regularly, based on inflation and increase in per-capita income;
- Simplifying the tobacco tax system by gradually eliminating distinctions between different tobacco products (filtered /non-filtered, tiers of cigarettes, distinctions between jarda and gul etc);
- Gradually introducing standardized packaging, i.e. marketing all forms of tobacco products in same amount packs (i.e. same number of sticks or same weight in container);
- Adopting and implementing a simple and effective tobacco tax policy (for 5 years) which will decrease tobacco use and increase revenue;
- Reinstating the 25 percent export duty on tobacco products.
Following these tax recommendations would greatly further economic development and align tobacco tax policy in Bangladesh with global best practices.
Bangladesh has committed to achieve tobacco-related targets under the Global Action Plan for the Prevention and Control of NCDs and the Sustainable Development Goals (SDGs), specifically SDG 8. Raising taxes on tobacco is a cost-effective way to reach those targets. It is also a major step towards achieving the vision of a tobacco-free Bangladesh by 2040.
At the same time, tobacco tax reform will generate significant additional revenue to finance Bangladesh health and development priorities. This is a clear ‘win-win’ for the Government and people of Bangladesh.