Local cigarette manufacturers allege facing discrimination in tax hike

Local cigarette manufacturers have alleged that the government is discriminating against them by imposing higher taxes than foreign manufacturers.

The National Board of Revenue (NBR) has imposed a heavier tax burden on local cigarette companies, which will significantly impact the sector, the National Cigarette Manufacturers Association said at a press conference at a Dhaka hotel today (12 January).

Reading out a written statement at the briefing, the association's General Secretary Nazmun Nahar Lucky said while taxes on foreign cigarettes have been increased by only 2%, the tax rate for local companies has been raised by 12%. 

"This discriminatory and targeted tax hike threatens the closure of local companies, according to local entrepreneurs," she said.

According to the association's statement, local companies are becoming increasingly fragile due to the monopolistic trade practices of multinational corporations and the dominance of government officials.

Nazmun Nahar pointed out that only a nominal 2% supplementary duty has been imposed on cigarettes produced by foreign companies while struggling local entrepreneurs face an almost 12% duty increase on lower-tier cigarettes in a single fiscal year.

Describing the difference in tax hikes as a "deeply discriminatory and self-destructive policy", she said the local industry, which supports the livelihoods of 10 lakh people, including farmers, factory workers, and marketing staff, is at risk of destruction due to this unprecedented and biased taxation policy.

The association's leaders highlighted at the press conference that British American Tobacco (BAT), which used to make a profit of Tk200 crore a decade ago, now earns Tk2,000 crore.

A portion of this profit, amounting to Tk1,700 crore, is being remitted abroad as dividends for foreign shareholders.

In contrast, they said profits from local companies remain within the country, contributing to employment generation. Due to the dominance of foreign companies over the past decade, local businesses are on the verge of collapse, they said.