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Hike tobacco prices to raise revenue by Tk10,000cr: Speakers

The move would also prevent 1.1m deaths
Staff Correspondent
01 Apr 2024 17:38:00 | Update: 01 Apr 2024 21:40:40
Hike tobacco prices to raise revenue by Tk10,000cr: Speakers
— Representational Photo

Raising tobacco product prices through effective taxation will not only increase the government’s revenue earnings, but will also reduce the prevalence of tobacco use and thereby, the government's healthcare cost attributable to tobacco-induced diseases.

Therefore, in the upcoming national budget for FY2024-25, the prices of tobacco products – particularly the price and tax rate of low-tier cigarettes – must be increased to push these products out of the purchasing capacity of the youth and the poor.

Speakers made the remarks during a journalists' workshop titled “Tobacco Tax and Price Measures: National Budget FY 2024-25,” held in the city’s BMA Bhaban, jointly organised by PROGGA (Knowledge for Progress) and ATMA (Anti-Tobacco Media Alliance) on Monday.

Twenty-seven journalists from print, television, and online media outlets participated in the workshop.

It should be noted that the low-tier cigarettes constitute 75 per cent of the total cigarette market of Bangladesh. The supplementary duty imposed on this tier is merely 58 per cent. It is, therefore, quite evident that compared to other cigarette tiers, hiking prices and supplementary duty of low-tier cigarettes will encourage a much larger number of low-income tobacco users to quit.

The tobacco prices and taxation proposals presented during the workshop are as follows.

The retail price of low-tier cigarettes should be increased to Tk 60 for 10 sticks from the existing Tk 45, followed by a 63 per cent supplementary duty.

The prices of 10 sticks should be set at Tk 80, Tk 130 and Tk 170 for medium, high, and premium tiers respectively, followed by the existing 65 per cent supplementary duty on these three tiers.

For non-filtered bidis, the retail price should be Tk 25 for 25 sticks. In the case of filtered bidis, the retail price for 20 sticks should be set at Tk 20. Both prices should be followed by a 45 per cent supplementary duty.

Regarding smokeless tobacco, the retail price for 10 grams of jarda and gul should be Tk 55 and Tk 30, followed by 60 per cent supplementary duty. The budget proposals also suggest continuing the existing 15 per cent VAT and 1 per cent health development surcharge (HDS) on the retail prices of tobacco products.

It was also informed that the implementation of the above-mentioned budget proposals by anti-tobacco organizations would generate Tk 10,000 crore as additional revenue which could greatly contribute to tackling the existing financial crisis.

Additionally, the proposals, in the long run, will also help prevent the premature deaths of 1.1 million Bangladeshis, including nearly half a million youths.

World Health Organization (WHO) Bangladesh National Professional Officer Syed Mahfuzul Huq and PROGGA Tobacco Control Project Head Hasan Shahriar delivered the keynote presentation before journalists.

Among the discussants were Program's Manager (Bangladesh) for Campaign for Tobacco-Free Kids (CTFK) Md Abdus Salam, Convener of ATMA Liton Haider, Co-Convener of ATMA Mizan Chowdhury, and Executive Director of PROGGA ABM Zubair.

It should be noted that 37.8 million adults in Bangladesh use tobacco products (smoked and smokeless). 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 Tk 30,560 crore while the revenue generated from the tobacco sector stands at only Tk 22,810 crore.

Hiking prices of tobacco products discourage the youth from getting hooked on tobacco addiction and encourages existing, particularly the low-income demographic, to quit.