Pandemic time budget plan

Experts for hiking tobacco tax


Experts on Sunday proposed the government to apply specific taxes as well as a two-tier pricing system in cigarettes, and 3 percent surcharge on retail prices of all tobacco products in the upcoming budget due to coronavirus pandemic.

They made several proposals and calculated that implementation of their proposals would raise up to Tk11,000 crore in additional revenues that may come in handy to bear coronavirus related medical expenses and implementation of stimulus packages.

Eminent economist and Convener of National Anti-Tobacco Platform Dr. Qazi Kholiquzzaman Ahmad, former vice-chancellor of Dhaka University Prof AAMS Arefin Siddique, Research Director of Bangladesh Institute of International and Strategic Studies Dr. Mahfuz Kabir, and Senior Research Fellow of Bangladesh Institute of Development Studies Dr. Naznin Ahmed made the recommendations from a webinar after agreeing to some proposals.

They referred to the WHO’s guidelines that suggest smokers are more vulnerable to Covid-19 than non-smokers and urged the government to take actions right now.

They said increasing tobacco tax would also help the government implement Prime Minister Sheikh Hasina’s vision of tobacco free Bangladesh by 2040.

The proposals include:
1. Bringing the number of price slabs down to two (low and high) from four: A) Merge the 37+ and 63+ taka tiers under low tier and the minimum retail price for 10 sticks should be Tk65. A supplementary duty of 50 percent and 10-taka specific tax should be imposed on the low-tier.

B) Merge the 93+ and 123+ taka tiers under premium tier and the minimum retail price for 10 sticks should be Tk125. A supplementary duty of 50 percent and 19-taka specific tax should be imposed on the premium tier.

2. Elimination of price distinction between filtered and non-filtered bidis: In bidi, the price for 25 filtered sticks should be Tk40, which will be followed by a supplementary tax of 45 percent and a 6.85-tk specific tax. For 20 filtered bidi sticks, the price should be Tk32, followed by a supplementary tax of 45 percent and a 5.48-taka specific tax.

3. Increase the price of smokeless tobacco (SLTs): For SLT products, the price per 10-gram jarda and gul should be BDT 40 and 23 respectively. A supplementary duty of 45 percent will be applied in both cases. A specific tax amounting BDT 5.71 and 3.45 will be realized for jarda and gul; A 15 percent value-added tax and 1 percent Health Development Surcharge will still be applied to all tobacco products.

4. Impose a 3 percent surcharge on retail prices of all tobacco products. If the aforementioned proposals are implemented, it would raise in additional revenues up to Tk10,000 crores for the govt. Also, an additional Tk1,000 crore would come from the 3 percent surcharge. The additional revenues generated may help the government to recover losses caused by the coronavirus pandemic, bear coronavirus related medical expenses and implement the stimulus packages.

At the same time, it would encourage nearly 2 million current adult smokers to quit and prevent 6 lac premature deaths in the long run, they said. Moreover, any future spread of viruses similar to coronavirus can be easily contained.

Anti-tobacco group PROGGA and Anti-Tobacco Media Alliance (ATMA), anti-tobacco organizations including ACD, YPSA, Dhaka Ahsania Mission, National Heart Foundation, TABINAJ and BITA prepared those proposals which were discussed at the webinar and agreed by the experts panel.

“We know that tobacco use, in all its forms, is severely detrimental to health. The ongoing COVID-19 pandemic once again indicated how important control of the use of tobacco products is. A huge portion of the population, victims of direct or indirect tobacco use are currently at grave risk of severe coronavirus infection,” Economist Kholiquzzaman Ahmad said.

“In order to recover from the shock of COVID-19 pandemic and also to build a healthy society in the future, to rebuild the economy and ensure development, it is essential to get accustomed to a tobacco-free environment.

“This is why my proposal is to increase the tobacco prices and taxes to bring it out of the purchasing capacity of the youth and the poor in the upcoming 2020-21 national budget,” he said.