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Demands for Effective Price Hike in the Final Budget

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The proposed national budget for FY 2023-24, if adopted, will once again render tobacco products cheaper than essential commodities. This will raise tobacco-related illness and deaths, deprive the government of the opportunity to earn additional revenue, and only benefit tobacco companies. Economists and anti-tobacco leaders have raised demand for introducing specific supplementary duty (SD) to effectively raise the prices of tobacco products in the final budget. Such issues have been discussed today (12 June 2023, Monday) during a post-budget press conference on tobacco price and tax measures, held at the Tofazzal Hossain Manik Mia auditorium of the press club, jointly organized by research and advocacy organization PROGGA (Knowledge for Progress) and Anti-tobacco Media Alliance (ATMA).

During the press conference, PROGGA and ATMA informed that the increase in prices of 10 sticks cigarettes ranges from 1.8 percent to 12.5 percent. However, according to the government reports, the year-on-year increase in the prices of loose wheat flour (atta), broiler chicken, sugar, eggs, powder milk, and red lentil ranges from 14.5 percent to 71.7 percent. As a result, tobacco products will become much cheaper compared to other essential commodities, which will encourage people to get hooked on smoking, and thus threatening public health.

The proposed budget has not raised the prices of bidi. This is the fourth consecutive time the budget has kept the retail price of bidi unchanged and the seventh consecutive time not to raise the SD imposed on bidi. The prices of per gram jarda and gul have been raised by 50 paisa and 30 paisa respectively and the SDs have been kept unchanged.

It was also informed during the press conference that the proposed budget raised retail prices of tobacco products without increasing the SD imposed on those products. This will only increase the profits of tobacco companies but deprive the government of the opportunity to earn additional revenue. As per the proposals of anti-tobacco organizations, only by introducing 65 percent of SD in the low-tier cigarettes, the government can earn at least BDT 17 billion as additional revenue. As the proposed budget has set the SD on the low tier of cigarettes at only 58 percent, the companies will pocket at least BDT 4.86 billion as additional profit.

In his speech as the chief guest of the event, eminent economist and convener of the National Anti-Tobacco Platform, Dr. Qazi Kholiquzzaman Ahmad said, “The budget does not reflect any of the proposals that we have put forth regarding a reform of the tobacco tax structure. We strongly demand that the government incorporate such proposals in the final budget to safeguard public health.”

Dr. Mahfuz Kabir, Research Director of Bangladesh Institute of International and Strategic Studies (BIISS), said, “There is an ample opportunity to raise additional revenue by hiking the SD on the low tier of cigarettes to 65 percent. The proposed budget has replaced the ad-valorem system with specific taxes on petroleum products, which should also be followed in case of tobacco products to benefit both the economy and public health.”

The following proposals were raised to be included in the finalized budget:

Cigarette: The retail price of the low-tier cigarettes should be set at BDT 55 for 10 sticks, followed by BDT 35.75 as specific supplementary duty (65 percent of the final retail price). In the medium-tier of cigarettes, the retail price should be set at BDT 70 for 10 sticks, followed by BDT 45.50 as a specific supplementary duty; and in the high-tier, the retail price and supplementary duty for 10 sticks should be BDT 120 and 78.00 respectively. In the premium tier, imposing a specific supplementary duty of Tk 97.50 for 10 sticks while retaining the retail price at BDT 150 as per the proposed budget.

Bidi: For non-filtered bidis, the retail price should be BDT 25 for 25 sticks, followed by Taka 11.25 as a specific supplementary duty. In the case of filtered bidis, the retail price for 25 sticks should be set at BDT 20, to be followed by a BDT 9.00 as a specific supplementary duty.

Jarda and Gul: For 10 grams of jarda, imposing a specific supplementary duty of Tk 27 while retaining the retail price at BDT 45 as per the proposed budget. For 10 grams of gul, the retail price should be BDT 25 and supplemented by BDT 15 as a specific supplementary duty.

It was informed that the implementation of the abovementioned proposals will raise BDT 9,600 crores in additional revenues and prevent the premature deaths of 4.88 lakh adults and 4.92 lakh youths.

The discussants in the event include Syed Yusuf Sadat, Research Fellow, Centre for Policy Dialogue (CPD), Mortuza Haider Liton, convener of ATMA, Md. Abdus Salam, Program Manager, Campaign for Tobacco-free Kids (CTFK) Bangladesh, and ABM Zubair, Executive Director, PROGGA, and leaders of different anti-tobacco organizations. Nadira Kiron, Chief Reporter, ATN News, and Co-convener of ATMA, hosted the event whereas Md. Hasan Shahriar, Head of Tobacco Control, PROGGA, presented an analysis of the proposed budget and raised demands for final budget.

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