Progga, Atma for raising tobacco prices to reduce deaths, increase revenue

Research and advocacy organisations Progga (Knowledge for Progress) and Anti-Tobacco Media Alliance (Atma) have urged the government to increase the prices of all tobacco products by introducing specific taxes. 

The two organizations jointly unveiled their budget proposals, for FY2022-23, regarding tobacco prices and taxes during a press conference held at the National Press Club in Dhaka on Tuesday (17 May). 

The event was supported by the Campaign for Tobacco-Free Kids (CTFK).

In support of the budget proposals, Dr Qazi Kholiquzzaman Ahmad, eminent economist and convener of the National Anti-Tobacco Platform, said, "Implementation of these proposals will increase revenue earnings, lower medical expenses, and expedite the realization of the prime minister's vision of making Bangladesh tobacco-free by 2040." 

The budget proposals for the upcoming fiscal year include: In the low-tier of cigarettes, the retail price should be set at 50 for 10 sticks, followed by Tk32.50 as specific supplementary duty (SD), in the medium-tier, the retail price should be set at Tk75 and SD at Tk48.75; and in the high-tier, the retail price and supplementary duty for 10 sticks should be followed by Tk120 and Tk78.00 respectively and in the premium tier, the numbers should be Tk150 and Tk97.50. 

The proposals also recommended the number of cigarette tiers should be reduced from four to two in FY2022-23 to FY2027-28 mid-term period.

The organisations said that this is because the existing four-tiered ad valorem structure has made cigarettes cheaper and more affordable. 

Consumers tend to switch to cheaper brands, rather than quit, once the prices are increased, they added.

For non-filtered bidis, the retail price should be Tk25 for 25 sticks, followed by Tk11.25 as a specific supplementary duty. 

In filtered bidis, the retail price should be Tk20 for 20 sticks, followed by Tk9 as a specific supplementary duty. 

In the case of smokeless tobacco, the retail prices for 10g of jarda should be Tk45, followed by Tk27 as specific supplementary duty. For 10g of gul, the retail price should be Tk25 and supplemented by Tk15 as a specific supplementary duty. 
The budget proposals also suggest imposing 15% VAT on retail prices of tobacco products, and 1% heath development surcharges. 

The realisation of the tax and pricing proposals would encourage 1.3 million adults to refrain from smoking, save the lives of more than 445,000 current adults and nearly 448,000 youth from premature deaths, and earn Tk9,200 crores in additional revenues. 

Most importantly, increasing the prices of bidi, jarda and gul would discourage the use of these products among low-income demographic and boost government revenues from these sectors. 

The event was participated by Dr Rumana Huque, professor, department of economics, University of Dhaka, Syed Yusuf Saadat, research fellow, Centre for Policy Dialogue (CPD), Md Mostafizur Rahman, lead policy advisor for Campaign for Tobacco-Free Kids (CTFK), Bangladesh, ABM Zubair, executive director, Progga and leaders of different anti-tobacco organisations. 

Nadira Kiron, co-convener of Atma, hosted the event whereas Md Hasan Shahriar, head of Tobacco Control, Progga, presented the budget proposals.

It should be noted that 35.3% (37.8 million) of adults in Bangladesh use tobacco. 

Tobacco-related illnesses claim 161,000 lives a 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, which was much higher than revenues earned from the tobacco sector (Tk22,810 crore) in that year.