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Specific tax on tobacco products to increase revenue up to Tk 9,800cr

World No Tobacco Day on Sunday

Published : 30 May 2020 09:20 PM | Updated : 06 Sep 2020 04:24 PM

The ‘World No Tobacco Day’ will be observed in Bangladesh on Sunday (May 31) as elsewhere in the world with the theme ‘Protecting youth from industry manipulation and preventing them from tobacco and nicotine use’.

With a view to raising mass awareness about negative impacts of tobacco, the anti-tobacco platforms have chalked out various programmes. Most of the programmes will be observed virtually due to Covid-19 crisis. The programmes include webinar, online talk-show, online human chain, discussion, poster campaign and other campaigns on social media.   

Farhana Zaman Liza, a Research Assistant at Tobacco Control & Research Cell (TCRC) of Dhaka International University, said that they are not holding outdoor programmes this year due to Covid-19 crisis. “We are holding social media and online-based various programmes to raise awareness about harmful impacts of tobacco use, policy advocacy and others,” she said. 

Marking the World No Tobacco Day, experts and anti-tobacco activists called upon the government to increase taxes on tobacco products in tackling the losses caused by the coronavirus pandemic. They also called for imposing specific tax.

They said that if specific taxation on tobacco products is imposed, the revenue from the sector would be more than Tk 4,100 crore to Tk 9,800 crore as compared to 2019-2020 fiscal year. Besides, about 20 lakh smokers will be encouraged to quit smoking if specific tax on tobacco products is imposed.

According to the estimation of Bangladesh Network for Tobacco Tax Policy, in the first year alone, the rate will be at least 14% higher than the current tax revenue from bidi and cigarette.

The platform pointed out the problems of tax structure of tobacco products. Tax dodging is being done by the tobacco companies due to the system of ad-valorem tax. 

For this reason, the government is losing a huge amount of revenue every year. The tiered tax structure makes the opportunity for low-income smokers in changing brands of cigarettes. Most of the chewing tobacco products are still beyond tax structure.

Bangladesh Network for Tobacco Tax Policy, however, placed some proposals in this regard. The proposals include specific tax on tobacco products, increasing tax every year, the current four-tier tax structure of cigarette should be made two-tier and increasing monitoring on tax collection.

Dr Rumana Haque, a professor of Economics at Dhaka University and convener of Bangladesh Network for Tobacco Tax Policy, said that although prices of the tobacco products is increased in the budget every year, it has not contributed much to the control of tobacco due to systemic limitations. However, it has made the tobacco companies more profitable. At the same time, tobacco use is increasing among the youths, she said.

Against this backdrop, the anti-tobacco organisations have proposed specific taxation on tobacco products to protect the public health and cope up with the losses caused by the Covid-19.

Dr Rumana called for implementing the proposed tax structure. Alongside decreasing the number of smokers, the specific tax on tobacco products will increase revenue income up to Tk 9,800 crore, she said.

Coronavirus has paralyzed public life around the world in the present time. The economy of the country and of the world is facing a growing crisis. The World Health Organization warns that smokers have a higher risk of coronavirus.

About 35% of people in Bangladesh use tobacco. At present, more than half of the country's population is young and by 2040, the number of elderly people in the country will increase. 

“Prime Minister has promised to make the country tobacco free by 2040. If the young generation of the country can be freed from tobacco use, it is possible to build Bangladesh as a tobacco free country by 2040. The combined efforts of all of us will go a long way in making the country tobacco free by 2040,” said Dr Rumana.

Saifuddin Ahmed, coordinator of the Bangladesh Anti-Tobacco Alliance, on Saturday said that the tobacco companies targeted the young generation. They are continuing advertisement of tobacco products, use of smoking scene in movie and drama and different other tactics in favour of their products. These must be stopped, he said. 

Barrister Shameem Haider Patwary, MP, said that the young generation must be saved form harmful effect of tobacco. All of us including the young generation must come forward to thwart the tactics of tobacco companies, he added. 

Advocate Syed Mahbubul Alam Tahin, Technical Advisor of The Union, said that Bangladesh is one of the countries in the world where tobacco products are cheap. The country is one of the leading tobacco business-friendly country. Against this backdrop, specific tax on tobacco is a must to control the tobacco use and to recover losses following Covid-19 crisis, he added.

He also pointed out the tax evasion issues of smoke-less tobacco products.