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Tax Tobacco More to Mend Corona Losses: ATMA’s Budget Proposal to NBR on Hike in Tobacco Tax and Prices

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World Health Organization (WHO) has recently informed that lungs hooked on tobacco are at greater risk of COVID-19. In Bangladesh, 37.8 million adults use tobacco and 41 million people fall victim to secondhand smoke in their own homes. This huge chunk of population, victims of direct or indirect tobacco use, are currently at grave risk of severe coronavirus infection.

The widespread availability has pushed this group to such tragic level of vulnerability. For years, a flawed taxation structure, particularly the 4-tier pricing system in cigarettes and the scope for purchasing tobacco products at very cheap prices have barred all the tobacco tax and price measures taken by the govt., from having desired effect, rendering them virtually ineffective.

Increasing tobacco prices and taxes is safeguarding public health since such move discourages the youth from developing the habit of tobacco use and also effectively encourages the current users, particularly the poor, to quit. Demanding hike in tobacco taxes and prices in the upcoming national budget, Anti Tobacco Media Alliance (ATMA) today (29 March 2020) submitted its proposal for 2020-21 national budget to National Board of Revenue (NBR). In line with decisions made by NBR, the budget proposals this year was sent via e-mail. The proposals raised following demands to be implemented in the upcoming national budget:

Budget proposals:

  1. Bringing the number of price slabs down to two (low and high) from four: A) Merge the 37+ and 63+ taka tiers under low tier and the minimum retail price for 10 sticks should be BDT 65. A supplementary duty of 50 percent and 10-taka specific tax should be added in low-tier. B) Merge the 93+ and 123+ taka tiers under premium tier and the minimum retail price for 10 sticks should be BDT 125. A supplementary duty of 50 percent and 19-taka specific tax should be added in premium tier.
  2. 2. Elimination of price distinction between filter and non-filter bidis: In bidi, the price for 25 filtered sticks should be BDT 40, which will be followed by a supplementary tax of 45 percent and a 6.85-taka specific tax. For 20 filtered bidi sticks, the price should be BDT 32, followed by a supplementary tax of 45 percent and a 5.48-taka specific tax.
  3. Increase the price of smokeless tobacco (SLTs): For SLT products, the price per 10 gram jarda and gul should be BDT 40 and 23 respectively. A supplementary duty of 45 percent will be applied in both cases. A specific tax amounting BDT 5.71 and 3.45 will be added for jarda and gul.

A 15 percent value-added tax will also be applied for all tobacco products.

If the aforementioned proposals are implemented, it will encourage nearly 2 million current adult smokers to quit. Such move will prevent 6 lac premature deaths in the long run and raise additional revenues up to BDT 10,000 crores for the govt.

The additional revenues generated may help the govt. to recover losses caused by the coronavirus pandemic. To curb the prevalence of tobacco at a much faster rate and to realize the vision for a tobacco-free Bangladesh by 2040 as declared by the Honorable PM, ATMA urges NBR to incorporate such proposals into the national budget for 2020-21.

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