Home ›› 29 Jul 2022 ›› Opinion
Bangladesh is one of the biggest tobacco consuming countries in the world. In Bangladesh, a variety of smoked (cigarettes and bidis) and smokeless (betel quid with tobacco, gul, sada pata, khaini) tobacco products are used. The Global Adult Tobacco Survey (GATS 2017) said, 35.3 per cent (3.78 crore) people (aged 15 years and above) use tobacco (smoking and smokeless products), while 3.84 crore adult people are victims of second hand smoking in Bangladesh.
Tobacco use in Bangladesh is deadly and costly.
According to Tobacco Atlas 2020, every year Bangladesh incurs financial loss, caused by tobacco related diseases and untimely death, worth Tk. 30,570 crore. On the other hand, sources said, Bangladesh government on an average receives Tk. 24000 crore as revenue annually from the tobacco sector.
Tobacco Atlas 2020 said that over 1.61 lakh people die of tobacco related diseases in Bangladesh every year. Over 12 lakh people are affected by different diseases due to tobacco. Of them, 3.82 lakh are victims of untimely disability.
Experts said, tobacco causes losses to health, economy and environment. It is one of the causes for mortality of non-communicable diseases. It imposes maximum economic burden on a family for the treatment of cardiovascular disease and cancer.
There is an environmental risk due to cultivation, processing and production of tobacco products, and emission of smoke of bidi-cigarette. Fertility of agricultural land is also damaged and food security reduced due to cultivation of tobacco. A huge amount of forest resources and cultivable land have been destroyed because of tobacco cultivation. Harmful toxic materials spread in the environment due to the burning of tobacco, they observed.
Every year, thousands of maunds of timber are being burned for drying tobacco leaves at different parts of the country. Hence, a huge amount of forest resources is being damaged.
A study report of Path Canada 2002, said tobacco cultivation is responsible for damaging 31 per cent of forest land in Bangladesh.
Tobacco cultivation causes massive damage to soil. Because, three times more urea fertilizer and insecticide are used for tobacco farming than paddy cultivation.
Hence, it is needed to address the tobacco issue urgently.
Raising the price of tobacco products through taxation is a proven measure for reducing tobacco consumption and thereby improving public health. World Health Organization (WHO) has recognized this measure as a best-buy intervention for preventing non-communicable diseases.
Article 6 of Framework Convention on Tobacco Control (FCTC), the world’s first modern-day global public health treaty negotiated under the auspicious of WHO, stressed on adopting price and tax measures to reduce the demand for tobacco.
Experts said, for tobacco control, two specified targets of Sustainable Development Goals (SDGs) are highly relevant. The first is strengthening the implementation of FCTC, while the second is reducing premature mortality from non-communicable diseases by 30 percent.
Furthermore, the Addis Ababa Action Agenda, which aims to provide a global framework for financing SDGs, also highlights tax and price measures on tobacco as key mechanisms to reduce demand and save lives while increasing domestic resources for development.
But in Bangladesh, the current tobacco tax structure is complex and not adequate to discourage tobacco use. It is a complex multi-tiered ad-valorem excise tax which includes large variations in tax rates depending on: the type of tobacco product (cigarettes, bidis, and smokeless tobacco); the product characteristics (filter or without filter); and – the cigarette price band (low, medium, high and premium priced brands).
The multi-tiered tax system for cigarettes has resulted in cigarettes remaining cheap and affordable; smokers switching to cheaper cigarettes instead of quitting; – stable cigarette sales per adult in recent years; – a relatively constant cigarette smoking prevalence in recent years.
Low taxes and prices on bidis and smokeless tobacco (jarda and gul) keep these products highly affordable and their prevalence high.
WHO said, the most effective way to reduce tobacco use is to raise the prices of all tobacco products through tax increases that lower their affordability. Higher prices discourage youth from starting tobacco use and encourage current users to quit.
It is needed to reduce price tiers from four to two in the medium-term, which will help reduce the gaps in final prices and specific tax rates between cigarette price bands.
Experts demanded an increase in supplementary tariffs on all types of tobacco products, and a specific tax. They observed that keeping the tax rate unchanged, even if the price of cigarettes is increased at all 4 tiers, will not have any effect on the protection of public health.
Therefore, some specific proposals to increase the tobacco tax and price were given on behalf of anti-tobacco organizations ahead of the proposed budget-FY 2022-23. These are: Impose specific supplementary duties, introduce specific supplementary duty with uniform tax cover on all cigarette brands.
Regarding cigarette, retail price for each 10 sticks at low tier should be fixed at Tk. 50 and Tk. 32.50 as specific supplementary duty should be imposed; at medium level retail price needs to be fixed at Tk. 75 and specific supplementary duty at Tk. 48.75; at upper tier Tk. 78 specific supplementary duty by fixing retail price at Tk. 120; at premium level Tk. 97.50 specific supplementary duty by fixing Tk. 150 as retail price. As a result, the rate of specific supplementary duty at all price level would be 65 per cent of final retail price.
VAT and 1 per cent health development surcharge on retail price of cigarette will be in force.
Shifting from an ad valorem to a specific tax system that would be periodically adjusted for inflation and income growth to achieve health goals and predict revenue more effectively. Substantially increasing the tax and price of cigarettes in the lowest tier, which captures the bulk of the market with a market share sharply increasing from 25 per cent in 2006-07, to 75 per cent in 2020-21.
Substantially increasing the tax and price of bidis will reduce the gap with the cheapest cigarettes and discourage switching between products. Improving the enforcement of tax policy on smokeless tobacco and exploring other non-tax measures can amplify its impact, such as standardized packaging.
The existing division among tobacco products (filter/non-filter bidi, value level of cigarette, separate retail price of jarda and gul) should be withdrawn to simplify the process of imposing tax.
All the producers of smokeless tobacco products should be brought under the tax regime.
The authorities concerned need to formulate and implement a simple and effective tobacco tax policy (for five year term), which will play a role in reducing the use of tobacco and increasing revenue.
Reinstatement of 25 per cent export duty on tobacco products should be done.
Anti-tobacco organizations said, if the current cigarette tax system is reformed following the recommendations, which were placed ahead of FY 2022-2023, it would achieve the following:
It would reduce the prevalence of cigarette smoking from 15.1 per cent to 14.0 per cent; encourage nearly 1.3 million adults to refrain from smoking and deter more than 895,000 youth from smoking initiation; save the lives of more than 445,000 current adults and nearly 448,000 current youth from premature deaths in the long term; generate nearly BDT 396 billion in tax revenue adding about BDT 92 billion in additional tax revenues from the Supplementary Duty, Health Development Surcharge and VAT on top of the expected collection for FY 2021-2022, which is an increase by 30 per cent of current tax revenue from cigarettes in the first year.
Increasing cigarette prices more at the low tier will help relatively lower income smokers who are more likely to smoke brands from the low tier to quit and at the same time limit the ability of smokers to substitute to cheaper brands when prices increase in the higher price tiers.
Achieving SDG’s target of 3.4 - To reduce non-communicable disease deaths by one-third by 2030, this additional revenue can be spent.
Increasing the price of low-tier cigarettes could protect low-income cigarette users. About 21 per cent of their income is spent on tobacco products. If this money is spent on education instead of tobacco products, it will be possible to increase the total cost of education for their children by 11 per cent.
The tax recommendations, once implemented, would greatly advance the cause of economic development, and align tobacco tax policy in Bangladesh with global best practices.
Bangladesh is committed to achieving tobacco-related targets under the Global Action Plan for the prevention and control of non-communicable diseases and the SDGs. Raising taxes on tobacco is a cost-effective way to reach those targets. It is also a major step towards achieving the vision of a tobacco-free Bangladesh by 2040.
Tobacco tax reform will also generate significant additional revenue to help finance Bangladesh health and development priorities. This is a clear ‘win-win’ for the government and people of Bangladesh.
Experts believe that the current tobacco tax structure is too complex and is a major obstacle to discouraging tobacco use. We have to simplify this tax structure. If the tobacco tax is increased in an appropriate manner, it will play an effective role in reducing tobacco use.
According to Dr. Habibe Millat, MP, Chairman of Bangladesh Parliamentary Forum for Health and Wellbeing, to help tobacco users out of this horrible addiction, the globally accepted method is to impose a high specific tax, which will eventually help us achieve a tobacco-free Bangladesh by 2040.
A study, published in the Tobacco Control (April 2021), shows that significant increases in cigarette prices at the lower segment would effectively reduce cigarette consumption among the people having low expenditure, improve health equity and enhance government revenue in Bangladesh.
Experts said, the government should now reconsider the proposals for reforming taxes on tobacco products in the national interest.
The writer is a media professional. He can be contacted at timir1215@gmail.com
