Call for raising tobacco product tariff to increase revenues

Published : 17 May 2022 08:40 PM

Eminent economist Dr. Qazi Kholiquzzaman Ahmad on Tuesday said, the steps like increasing prices of all tobacco products by introducing specific taxes will increase revenue earnings, lower medical expenses, and expedite the realization of the PM's vision of making Bangladesh tobacco-free by 2040." 

He was addressing a pre-budget press conference, jointly organised by research and advocacy organization PROGGA (Knowledge for Progress) and Anti-Tobacco Media Alliance (ATMA). 

The two organizations have jointly unveiled FY 2022-23 budget proposals regarding tobacco prices and taxes in the press conference, held at the National Press Club. The event was supported by the Campaign for Tobacco-Free Kids (CTFK).

Dr. Q K Ahmad, also the convener of the National Anti-Tobacco Platform attended the press conference as chief guest 

The budget proposals for FY 2022-23 are as follows: In the low-tier of cigarettes, the retail price should be set at 50 for 10 sticks, followed by BDT 32.50 as specific supplementary duty (SD), in the medium-tier, the retail price should be set at BDT 75 and Supplementary Duty at BDT 48.75; and in the high-tier, the retail price and supplementary duty for 10 sticks should be followed by BDT 120 and 78.00 respectively and in the premium tier, the numbers should be BDT 150 and BDT 97.50. 

The proposals also recommended in the FY 2022-23 to 2027-28 mid-term period, the number of cigarette tiers should be reduced from 04 (four) to 02 (two). 

This is because the existing four-tiered ad valorem structure has made cigarettes cheaper and more affordable. Consumers tend to switch to cheaper brands, rather than quit, once the prices are increased.

For non-filtered bidis, the retail price should be BDT 25 for 25 sticks, followed by BDT 11.25 as a specific supplementary duty. In filtered bidis, the retail price should be BDT 20 for 20 sticks, followed by BDT 9.00 as a specific supplementary duty. 

In the case of smokeless tobacco, the retail prices for 10 grams of jarda should be BDT 45, followed by BDT 27.00 as specific supplementary duty. 

For 10 grams of gul, the retail price should be BDT 25 and supplemented by BDT 15 as a specific supplementary duty. 

The budget proposals also suggest imposing 15 percent VAT on retail prices of tobacco products, and 1 percent heath development surcharges. 

The event was participated by Dr. Rumana Huque, Professor, Department of Economics, University of Dhaka, Syed Yusuf Saadat, Research Fellow, Centre for Policy Dialogue (CPD), Md. Mostafizur Rahman, Lead Policy Advisor for Campaign for Tobacco-Free Kids (CTFK), Bangladesh, ABM Zubair, Executive Director, PROGGA and leaders of different anti-tobacco organizations. Nadira Kiron, Co-convener of ATMA, hosted the event whereas Md. Hasan Shahriar, Head of Tobacco Control, PROGGA, presented the budget proposals.