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Introduce Specific Taxes and Raise Prices of Tobacco Products- PROGGA-ATMA Demand in Pre-Budget Press Conference

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In the upcoming national FY 2023-24 budget, the government must introduce a tier-based specific supplementary duty to raise the prices of cigarettes. Such 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 today (18 March 2023, Saturday) at the Tofazzal Hossain Manik Miah Auditorium of the National Press Club of 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.”

It was also proposed that in the medium-tier of cigarettes, the retail price should be set at BDT 70 from the existing BDT 65 for 10 sticks, followed by BDT 45.50 as a specific SD; and in the high-tier, the retail price and specific SD for 10 sticks should be BDT 120 from BDT 111 and 78.00 respectively. In the premium tier, the numbers should be BDT 150 (prices for 10 sticks) from BDT 142 and BDT 97.50 (specific SD).

As per the proposal presented during the event for non-filtered bidis, the retail price should be BDT 25 from the existing BDT 18 for 25 sticks, followed by Taka 11.25 as a specific SD. In the case of filtered bidis, the retail price for 20 sticks should be set at BDT 20 from BDT 19, to be followed by a BDT 9.00 as a specific SD. Regarding smokeless tobacco, the retail price for 10 grams of jarda should be BDT 45 from the existing BDT 40, followed by BDT 27.00 as a specific SD. For 10 grams of gul, the retail price should be BDT 25 from BDT 20 and supplemented by BDT 15 as a specific SD. The budget proposals also suggest imposing 15 percent VAT on the retail prices of tobacco products and continuing the existing 1 percent health development surcharge (HDS).

Speakers said, the implementation of the tax and pricing proposals of anti-tobacco activists would raise BDT 9,600 crores in additional revenues and prevent the premature deaths of 4.88 lakh adults and 4.92 lakh youths.

The event was participated by Syed Yusuf Saadat, Research Fellow, Centre for Policy Dialogue (CPD), Md. Mostafizur Rahman, Bangladesh Lead Policy Advisor, Campaign for Tobacco-free Kids (CTFK) , Mortuza Haider Liton, Convener, ATMA, ABM Zubair, Executive Director, PROGGA and leaders of different anti-tobacco organizations. Nadira Kiron, Co-convener of ATMA, hosted the event whereas Md. Hasan Shahriar, Head of Tobacco Control, PROGGA, presented the budget proposals.

It should be noted that tobacco claims 161,000 lives every year in Bangladesh. In 2017-18, the toll of tobacco use in the national economy (due to medical expenses and loss of productivity) stood at BDT 30,560 crore.

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