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Tobacco tax proposals in the budget are frustrating

Parliamentarians at Unnayan Shamannay’s post-budget discussion


Published : 21 Jun 2022 08:46 PM

Members of the Parliament perceive the tobacco tax proposals in the budget for FY 2022-23 to be very frustrating. The effective tobacco taxation proposals pushed by different anti-tobacco organizations, researchers, and activists have not been reflected at all in this budget for the coming fiscal year. 

They said this at a post-budget discussion session on Tuesday, organized by Unnayan Shamannay at the seminar room of Bishwoshahitto Kendro (Banglamotor, Dhaka). 

The MPs present at the event were- Umme Fatema Nazma, MP (Women Seat 12); Umme Kulsum Smriti, MP (Gaibandha 3); Doctor Samil Udding Ahmed Shimul, MP (Chapai Nawabganj 1); Md. Aftab Uddin Sarker, MP (Nilphamari-1); Md. Harunur Rashid, MP (Chapai Nawabganj-3); Md. Shifuzzaman Shikhor, MP (Magura-2); Shirin Akhter, MP (Pheni 1) and Fazle Hossain Badshah, MP (Rajshahi-2).

Former Governor of Bangladesh Bank and Unnayan Shamannay Chairperson- Professor Dr. Atiur Rahman joined the event digitally and made the welcome remarks. 

He said effective tobacco taxation proposals pushed by different organizations and individuals advocate for significantly increasing tobacco product prices (big push) in the coming fiscal year instead of increasing these prices negligibly every year. 

This would, he added, significantly reduce use of tobacco among the people, especially among the households with lower incomes. 

There were also proposals/recommendations to introduce specific supplementary duties on tobacco products instead of continuing with the ad-valorem taxation mechanism. 

But Dr. Rahman pointed out that if the tax rates proposed in Budget 2022-23 remain unchanged, then the country will not be able to get all the benefits of effective tobacco taxation. 

A background note was shared by Unnayan Shamanay. The paper shows that if the proposed (for FY2022-2023) tax rates are allowed to continue then- instead of lowering the sales of cigarette there will be a stark increase in cigarette sales in the coming fiscal year (a 1.5 percent increase). 

Moreover, as cigarettes are already being sold at prices higher than the ones proposed in the budget, the cigarette companies will have more scope to evade taxes.  

Shirin Akhter, MP pointed out that prior to the ongoing budget session of the Parliament- at least 100 MPs have sent letters (endorsing the effective tobacco taxation proposals) to the honorable Finance Minister.