Hike tobacco products' price to tackle fiscal deficit and safeguard public health, ATMA recommends

Anti-Tobacco Media Alliance (ATMA) has raised demands for an effective hike in tobacco products' prices and taxes to help the government tackle the fiscal shortfall and simultaneously, safeguard public health. 

The organisation's latest push for such a hike came today (08 February 2024, Thursday) in a pre-budget meeting for FY 2024-25 held at the conference room of the National Revenue Board (NBR), reads a press release.

Abu Hena Md. Rahmatul Muneem, Chairman, NBR presided over the meeting. In support of its demand, ATMA informed that budget proposals placed by anti-tobacco activists, if realized, can help the government raise a staggering BDT 9400 crore in additional revenue, which will come in handy to deal with the ongoing economic crisis. Implementation of such proposals, in the long run, will also help prevent the premature deaths of 1.1 million Bangladeshis, including nearly half a million youths.

The prices of tobacco products in Bangladesh are considerably low. Furthermore, compared to the prices of essential commodities, it is evident that these deadly products are getting even cheaper. Such growing affordability is particularly alluring for the youth and the poor which is undoubtedly an ominous sign for our public health. An analysis of the average retail prices of essential commodities in 07 metropolitan cities of the country (Dhaka, Chattogram, Rajshahi, Khulna, Sylhet, Barisal and Rangpur) between 04 July 2021 and 04 July 2023, as reported by the Department of Agricultural Marketing (DAM), shows that price of loose sugar has seen a 89 percent hike in this time period, the hike is 87 percent for potatoes, 75 percent for loose flour, 47 percent for pangash fish, 43 percent for eggs, 34 percent for soybean oil, 30 percent for powdered milk, and 27 percent for broiler chicken. However, during this same timeframe, the hike in the prices of different tiers of cigarettes ranged between 6 -15 percent only. 

The NBR Chairman said at the pre-budget meeting, "We will increase the prices of tobacco products in the upcoming budget for FY 2024-25. We are also considering the replacement of the current ad valorem tobacco tax structure with a specific tax system."

Senior Journalist Sukanta Gupta Alok, Mortuza Haider Liton, Convenor, ATMA, Nadira Kiron and Mizan Chowdhury, both Co-convenor of ATMA, Mir Mashrur Zaman Rony, Senior News Editor of Channel I and Doulat Akter Mala, Special Correspondent, the Financial Express participated in the event which was also attended by NBR officials

During the pre-budget meeting, ATMA urged policymakers to hike the retail price of low-tier cigarettes to BDT 60 for 10 sticks, followed by a 63 percent supplementary duty (SD). The prices of 10 sticks should be set at BDT 75, 125 and 165 for medium, high and premium tiers respectively. The prices should be followed by a 65 percent SD.

As per the proposal presented by ATMA, for non-filtered bidi, the retail price should be BDT 25 for 25 sticks. In the case of filtered bidi, the retail price for 20 sticks should be set at BDT 20. Both prices should be followed by a 45 percent SD.  Regarding smokeless tobacco, the retail price for 10 grams of jarda and gul should be BDT 55 and BDT 30, followed by 60 percent SD. The budget proposals also suggest retaining 15 percent VAT on the retail prices of tobacco products and continuing the existing 1 percent health development surcharge (HDS).

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 Tk30,560 crore.