Different anti-tobacco platforms have alleged that the tobacco companies in Bangladesh continue to sell cigarettes to smokers at higher prices than the MRP rate even after placing of proposed national budget for fiscal year 2023-34 in the Parliament.
The anti-tobacco platforms raised the allegation at a press conference organized to respond to the proposed tax on tobacco products in the national budget. The press conference was held at Dhaka Reporters Unity on Tuesday (June 13, 2023).
Bangladesh Anti-Tobacco Alliance (BATA), Bangladesh Network for Tobacco Tax Policy (BNTTP) and WBB Trust jointly arranged the press conference titled ‘Fixing of Tobacco Price and Taxation’.
Speakers of the press conference said that the tobacco companies do not accept the decision announced in the national budget, they continue to sell cigarettes at high prices although “ensuring supply of cigarettes at maximum retail price” was said in the budget speech.
The speakers said that this decision is very positive in terms of revenue collection and tobacco control. In implementation of this decision, the National Board of Revenue (NBR) has issued SROs making it mandatory to have the ‘maximum retail price prominently and imperceptibly printed on the packet’. It further states, “Cigarettes shall not be sold at any stage above the maximum retail price”. However, the tobacco companies do not accept this decision announced in the budget.
Hamidul Islam Hillol of BNTTP presented the main speech at the press conference with president of the Save the Environment Movement (POBA) and BATA’s advisor Abu Naser Khan in the chair. President of Bangladesh Cancer Society Professor Dr. Golam Mohiuddin Faruque, associate professor at Dhaka International University Bazlur Rahman, journalist and tobacco control researcher Sushanta Sinha and BATA’s Acting Coordinator Helal Ahmed also spoke at the press conference.
Speakers at the press conference said that by selling cigarettes at higher prices than the prices written on the cigarette packets, tobacco companies evade revenue of about Tk 5000 crore every year. To stop this evasion, the decision to ensure the supply of cigarettes at the maximum retail price in this budget will prevent tax evasion and increase the revenue of the government. However, a market inspection shows that even before the budget announcement, tobacco companies have increased the price of cigarettes.
According to the speakers of the press conference, this price hike rate is more than last year. On the other hand, tobacco companies are still selling cigarettes with the old prices printed on them, even though the new prices have come into effect from the day the budget was announced. In this situation, the benefits of the decisions announced in the budget depend on regular monitoring and strict implementation. National Board of Revenue (NBR) and other institutions concerned should take effective measures for proper implementation of this decision.
The speakers also said that in this year’s budget too, the system of ad-velorem tax on tobacco products has been maintained. As suggested by experts, not introducing a specific taxation system instead of ad-velorem system will not achieve effective success in reducing the consumption of tobacco products, increasing revenue and preventing tax evasion. Therefore, it is necessary to impose a specific tax on all types of tobacco products as soon as possible to increase revenue and protect public health.
They also said that the increase in the nominal price of tobacco products in the proposed budget will not play an effective role in reducing the consumption of tobacco, rather this product will become cheaper for the consumer in view of the price inflation and the increase in purchasing power. A mere 1 per cent increase in the marginal tax rate and a price increase of Tk 5 will actually benefit the tobacco companies.
