revenue
Bring smokeless tobacco products under tax net: PROGGA
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.
Also read: 1.26 lakh people die in Bangladesh every year in diseases related to tobacco use: PROGGA
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.
Read Tobacco causes 20% of deaths from coronary heart disease: Report
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.
Also read: National Budget: Progga, ATMA for hiking tobacco goods revenue
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.
Read Anti-tobacco platform’s annual conference on Saturday
Budget 2021-22: 'Striking balance between revenue targets, facilitating businesses crucial'
Finding a balance between achieving revenue targets and ensuring a business-friendly environment is crucial to overcome the economic challenges unfolded by the pandemic.
The government's expenditure comes from revenue, but it always tries to facilitate the businesses, National Board of Revenue member of tax policy Md Alamgir Hossain said Saturday.
Alamgir was addressing the "Pre-Budget Discussion for FY2021-22" organised by Dhaka Chamber of Commerce and Industry (DCCI) in association with Samakal and Channel 24.
Economic Affairs Adviser to the Prime Minister Dr Mashiur Rahma said "Achieving the revenue target without hurting economic activities is a priority for the government."
Also read: NBR to prioritize local industries in 2021-22 budget, says its chairman
"However, our tax-GDP ratio is comparatively low due to rebates at different levels. To make it more acceptable to everyone, a global standard tax, value added tax (VAT), supplementary duty (SD) and customs duty rate need to be in place."
Dr Mashiur said frequent changes in tax rate may slow down business growth and he suggested a gradual increase in it with a minimum time frame.
Brac Chairperson Dr Hossain Zilllur Rahman said, "As the second wave of Covid-19 is going on, it may wallop the economy. The next budget should also have a plan of recovery like the last one. Social protection should get major attention in it."
Disbursement of loans under stimulus for the cottage, micro, small and medium enterprises (CMSMEs) should be faster, and for that, mobile financial services can be engaged as a delivery vehicle, he added.
Also read: Budget 2021-22: Finance Ministry's coordination council meets to set priorities, parameters
Zilllur Rahman added that to keep the growth trajectory upward, the domestic market needs to be incentivised along with the export sector. "We need a transition from cheap labour economy to skilled labour economy and a game-changing policy review needs to be framed."
DCCI President Rizwan Rahman hoped that the next budget would have special attention to taxation and VAT policy, infrastructure, industry and trade as well as the financial sector.
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Speakers for stopping illicit capital flight for domestic resource mobilization
Speakers on Wednesday urged the authorities concerned to stop illicit capital flight with highest priority for earning more revenues.
They made the call at a virtual press conference, organized by EquityBD, a network of right based civil society, titled ‘Stopping Illicit Capital Flight Should be Highest Priority in Domestic Resource Mobilization’, said a press release.
The speakers expressed concern on the enhanced trend of illicit capital flight, black money, and default loan of the country.
They also urged for earning more revenue by tackling illicit financial flows rather than dependence on tax specially VAT as indirect tax and bank loan.
The virtual press conference was moderated by Rezaul Karim Chowdhury of EquityBD while Ahsanul Karim of COAST Trust presented a paper.
Sayed Aminul Haque and Ferdous Ara Rumee of EquityBD; Dr Kazi Maaruful Islam, Prof Development Studies, Dhaka University; Aamanur Rahman from CARE Bangladesh; Prodip Kumar Roy from CSRL spoken in the occasion among others were present.
Keynote speaker Md Ahasanul Karim said, “The government has declared a budget of 5,68,000 crore for 2020-21FY with a deficit budget of Tk 1,90,000 crore.”
The government is heavily depending on tax collection specially the VAT (value added tax) an indirect tax and bank loan, he said adding that the government is not giving emphasis in tackling illicit financial flow from where huge revenue could be collected.
As per Washington-based Global Financial Integrity (GFI) March 2020 report, a total of Tk 4,48,000 crore had been siphoned off Bangladesh during 2008-2014 and yearly average 64,000 crore through corruption, bribery, trade miss-invoicing and tax evasion.
This amount is more than two times of allocated Padma Bridge or two years of health budget, he said.
He urged the government to show zero tolerance to corruption, bank looting, earning black money and illicit fund transfer.
Amanur Rahman of CARE Bangladesh said the government has a lot of rules especially in respect of bank transaction, but hardly able to imply those on rich people.
He also criticized recent circular on 100 % foreign investment in e-commerce.
Syed Aminul Haque of COAST said the government should not allow investing black money to the share market and in property purchase.
Attending the programme, Fardous Ara Rumee said tax and process should be made easy so that it will support women empowerment and women entrepreneurs.
Revenue collection target difficult: ICAB
The Institute of Chartered Accountants of Bangladesh (ICAB) has observed that the targeted revenue of Tk 378,000 in the proposed budget will be difficult to collect due to the negative impacts of the COVID-19 pandemic.
S.Korea's Hyundai Motor posts biggest revenue in 2019
Hyundai Motor, South Korea's biggest automaker, posted its biggest revenue last year on an enhanced product mix and a positive effect from the foreign exchange rate, the company said Wednesday.
Fake bidi band-rolls deprive govt of millions in revenue
The market here is flooded with bidi packets stamped with spurious and fake band-rolls, depriving genuine businessmen of customers and the government of huge revenues.