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PROGGA and ATMA push for 63% tobacco tax hike 

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Published: 16:53, 20 April 2024

PROGGA and ATMA push for 63% tobacco tax hike 

Photo: Collected

To safeguard public health, research and advocacy organizations PROGGA (Knowledge for Progress) and Anti-Tobacco Media Alliance (ATMA) have called for an effective hike in the prices of tobacco products in the upcoming FY 2024-25 national budget. 

The two organisations presented their tobacco taxation and pricing-related proposals for the upcoming FY on Saturday (20 April 2024) during a press conference held at the National Press Club. 

Dr. Mahfuz Kabir, Research Director of the Bangladesh Institute of International and Strategic Studies (BIISS), proposed to raise the supplementary duty to 63 per cent from 58 percent.

"Currently 75 percent of total cigarette users belong to the low tier. However, the supplementary duty (SD) in this tier stands at only 58 per cent. Raising the SD to 63 per cent would certainly reduce the prevalence of cigarette use and raise revenue inflow for the government. The additional revenue would also play a major role in tackling the ongoing financial crisis,” he said.

An analysis of the average retail prices of essential commodities in 07 metropolitan cities of the country (Dhaka, Chattogram, Rajshahi, Khulna, Sylhet, Barisal, and Rangpur) between 4 July 2021 and 04 July 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 per cent 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.

The proposed tobacco pricing and taxation adjustments outlined during the conference advocate for a significant upsurge in prices across various product tiers. Notably, the suggested retail price for low-tier cigarettes would rise to BDT 60 for 10 sticks from the current BDT 45, complemented by a 63 percent supplementary duty. Similar adjustments were recommended for medium, high, and premium tiers, with corresponding price increments and supplementary duties.

For non-filtered bidis, the retail price should be BDT 25 for 25 sticks. In the case of filtered bidis, the retail price for 20 sticks should be set at BDT 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 BDT 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.

The implementation of these proposals is anticipated to yield a substantial additional revenue of BDT 10,000 crore, which holds the potential to alleviate the prevailing financial constraints. Moreover, in the long term, these measures are projected to avert the premature deaths of 1.1 million Bangladeshis, including nearly half a million youths.

In support of the budget proposals, economist and convener of the National Anti-Tobacco Platform, Dr. Qazi Kholiquzzaman Ahmad said, that tobacco products becoming cheaper over time compared to the prices of essential commodities is an ominous sign for public health.

“Considering hundreds of thousands of premature deaths, diseases, detrimental effects on environment and ecosystem- all caused by tobacco, the upcoming national budget must effectively hike the prices of tobacco products to bring it beyond the purchasing power of the people,” he said.

The panel of speakers in the event include Md. Abdus Salam, Program's Manager (Bangladesh) for Campaign for Tobacco-Free Kids (CTFK), Mortuza Haider Liton, Convener, ATMA and ABM Zubair, Executive Director, PROGGA.

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.