Reforming Bangladesh’s tobacco taxation system, such as gradually incorporating a Tk 5 tax on purchase of each 10 cigarette sticks, might effectively reduce consumption and increase revenue collection, says a report released recently.
Prepared by the Brac Institute of Governance and Development (BIGD) of Brac University, the report also recommends increasing the tax base, reducing cigarette pricing tiers from four to two and registering all entities producing smokeless tobacco products.
Titled “The Economics of Tobacco Taxation in Bangladesh”, the report analyses tobacco demand using data from the Household Income and Expenditure Survey of the Bangladesh Bureau of Statistics.
The BIGD organised the report’s launching at Brac Centre Inn on 24 October 2019.
Other suggestions include harmonising tax rates across all tobacco products, reforming and enhancing implementation of laws of the National Board of Revenue (NBR) and withdrawing incentives for tobacco industries, such as “highest taxpayer” awards.
Urging to spend a share of tobacco taxation revenue in increasing public health awareness, the report recommends incorporating the findings in the eighth Five-Year Plan, citing that prevalence of smoking in Bangladesh is the second highest in Asia.
Speakers at the launching also pointed out that tobacco prices in Bangladesh were the lowest among its neighbours, readily available and affordable to people of all classes, leading to soaring consumption and healthcare costs.
Addressing the event, Planning Minister MA Mannan said, “The government is committed to making Bangladesh a tobacco-free country by 2040.”
In reply to an audience member’s query on why the government was yet to reform the tax structure, he said the process was complex.
He, however, assured to do all in his power to reform the tax structure as soon as possible to eradicate the “established evil”.
Another audience member suggested shielding government policymaking from tobacco industries’ influence.
An economics professor of the University of Dhaka, Dr Rumana Huque, also pointed out that reducing tobacco consumption also requires monitoring the supply side.
“Human wellbeing should be at the centre of all policy related to tobacco consumption,” said Dr Sultan Hafeez Rahman, professorial fellow of the BIGD, while chairing the programme.
“Since it (tobacco consumption) has strong negative effects on individual health and society, we have to tax them so that we can use those resources to generate better health for those who are affected,” he said in his closing remarks.
Barrister Jahangir Hossain, a retired NBR member, also spoke at the programme.