Sheikh Muhammad Mahbubus Sobhan
A very basic formula of the economics says that if the price of any product goes up, the demand will go down. To be sure, tobacco is not out of this formula either. So, every year before the budget session, anti-tobacco organizations demand for the increase of tobacco products price. Considering that demand, the National Board of Revenue marginally increases the price of bidi-cigarettes every year. But that is just a hoax.
Despite this price increase, Bangladesh is one of the countries with the lowest price of tobacco in the world. According to a 2018 report by the World Health Organization (WHO), cigarettes are available in Bangladesh at the lowest prices in South Asia after Myanmar. And smokeless tobacco products like bidi and jorda-gul are cheaper.
This availability of tobacco products is one of the major obstacles to reducing tobacco use. According to the Global Adult Tobacco Survey 2017, more than 37.8 million adults in the country still use tobacco. This widespread use of tobacco has a devastating effect on public health and the economy. According to Tobacco Atlas, more than 161,000 people die of tobacco-related diseases in Bangladesh every year. Moreover, more than Tk 30,000 crore is spent on the treatment of tobacco related diseases.
Research by the World Health Organization and various national and international anti-tobacco organizations has shown that the use of tobacco in Bangladesh is not declining due to the opportunity to buy tobacco products at lower prices and the flawed tax structure, especially cigarettes with 4 price tiers. When the price of tobacco is high, young people are discouraged from initiating tobacco use and current tobacco users, especially the poor, are encouraged to quit. But the rate of increase in tobacco prices in Bangladesh has failed to take it beyond the reach of the people.
Every year in the budget, the price of bidi-cigarettes is increased by BDT 5-10 per packet, that is, from BDT 0.50 per stick to BDT 1.00! Although the government's revenue has increased a bit because of such price increases, it is mainly the tobacco companies that have benefited. Giving an example will make the point clear.
A multinational tobacco company has doubled its production in the last 10 years. But at the same time their profits have increased 5 times! The complex and flawed tobacco tax structure has allowed the tobacco company to make a huge profit. At present, the supplementary duty, VAT and surcharge on mid-range cigarettes is 81 per cent. In other words, if the price of cigarettes is increased by BDT 1.00, the government will get BDT 0.61. The remaining BDT 0.19 will go into the pocket of the tobacco company, for which the company does not have to spend any more!
In 2016, Prime Minister Sheikh Hasina suggested changing the flawed tobacco tax structure. This tax structure change is very important to implement the declaration she has made to make Bangladesh tobacco free by 2040. At present, there is a need to impose a specific duty on tobacco products instead of the supplementary duty at the rate of retail price (ad valorem). At the same time, the multi-tiered price structure of bidi-cigarettes should be abolished and brought down to a maximum of two tiers. Moreover, the price of tobacco needs to be increased regularly in line with inflation and per capita income growth in such a way that it puts a strain on the consumer's pocket when buying it. If the price of a cigarette of BDT 10 raises to BDT 11, its consumption will not decrease much. But if the price can be raised to BDT 15 or more, then tobacco users will definitely be forced to reduce their consumption.
Moreover, the purpose of raising the price of tobacco products is not limited to reducing the use of current users. On the contrary, raising prices effectively discourages teenagers from initiating tobacco use. According to the Prime Minister's announcement, in order to build a tobacco-free Bangladesh, the use of existing tobacco addicts must be reduced. On the other hand, measures must be taken to prevent anyone from initiating tobacco use.
And if the price of tobacco is increased properly, it can hunt two birds with one stone. According to the World Health Organization, raising the price of tobacco products would encourage about 1.1 million adult smokers to quit smoking and discourage more than 800,000 young people from starting smoking. As a result, in the long run, it is possible to prevent the untimely death of 3 lakh 90 thousand current smokers and 4 lakh young people.
Dr. Sheikh Muhammad Mahbubus Sobhan is Registrar (Clinical Research), National Heart Foundation Hospital and Research Institute
