Rights bodies for specific taxes and raising tobacco prices in next budget

Published : 18 Mar 2023 08:12 PM
  • t

In the upcoming national FY 2023-24 budget, the government must introduce a tier-based specific supplementary duty to raise the prices of cigarettes. 

The demand has been voiced by research and advocacy organization PROGGA (Knowledge for Progress) and Anti-Tobacco Media Alliance (ATMA) during a pre-budget press conference on tobacco taxation and prices, held on Saturday at the National Press Club in the Capital.

During the press conference, speakers particularly urged the policymakers to hike the retail price of the low-tier cigarettes to BDT 55 from BDT 40 for 10 sticks, followed by BDT 35.75 as specific supplementary duty (65 percent of the final retail price).   It was also informed that, compared to other cigarette tiers, hiking prices at the low tier encourages the low-income demographic (users of such brands) to quit smoking. 

A simultaneous price hike at the higher tiers also decreases the likelihood of users switching to cheaper brands. Reforming the tax system by introducing a specific tax, as recommended by the WHO (and as employed in most countries worldwide), would further reinforce the effectiveness of the tobacco tax system. Supporting the budget proposals raised during the event, eminent economist and convener of the National Anti-Tobacco Platform, Dr. Qazi Kholiquzzaman Ahmad said, “As per the conditions set by the IMF for its loan package, Bangladesh needs to raise the revenue by at least an additional 0.5 percent of its GDP in the next FY. 

This means an additional BDT 65,000 crore in revenue needs to be earned in FY 2023-24. By hiking the prices of tobacco products, a considerable portion of the additional amount can be managed. 

The additional revenue earned from tobacco products can also help the government tackle the adverse impacts of the Covid-19 pandemic and the Russia-Ukraine war.” Dr. Mahfuz Kabir, Research Director of Bangladesh Institute of International and Strategic Studies (BIISS), said, “75 percent of all cigarette users are the consumers of low-tier brands. Unfortunately, the Supplementary Duty (SD) imposed on this tier stands at a mere 57 percent. Raising the number to at least 65 percent would help reduce cigarette use and increase govt. revenue.”