Bangladesh’s cigarette prices, tax structure far below int’l best practice

Highlights:

• US-based research initiative Tobacconomics has released the first edition of the International Cigarette Tax Scorecard
• Bangladesh got an overall score of 2.38 out of 5 possible points
• The global average score is 2.07
• The top performing countries are Australia and New Zealand, with scores of 4.63
• Bangladesh had significantly improved its score on cigarette taxation policy from 0.87 in 2014 to 2.38 in 2018
• Improvements are needed in the tax structure and prices of cigarettes in the country
• The global average score rose only slightly from 1.85 in 2014 to 2.07 in 2018.

Tobacconomics, a US-based research initiative, has released the first edition of the International Cigarette Tax Scorecard, assessing the performance of cigarette tax policies in over 170 countries including Bangladesh.

Bangladesh got an overall score of 2.38 out of five possible points, which is slightly higher than the global average (2.07), but there is ample room to improve when compared to the top performing countries (4.63).

The top performing countries are Australia and New Zealand, which reflects their high, uniform specific cigarette excise taxes with regular increases that have significantly reduced the affordability of cigarettes.

Bangladesh had significantly improved its score on cigarette taxation policy from 0.87 in 2014 to 2.38 in 2018 but improvements are needed in the tax structure and prices of cigarettes.

Nearly half the countries scored less than two out of the five-point maximum. There has been little improvement between 2014 and 2018: the global average score rose only slightly from 1.85 in 2014 to 2.07 in 2018.

Tobacconomics is based at the University of Illinois at Chicago's Institute for Health Research and Policy and it conducts economic research to inform and shape fiscal policies for health globally.

The Cigarette Tax Scorecard was created by the University of Illinois Chicago's (UIC) Institute for Health Research and Policy.

The Tobacconomics scorecard assesses countries' cigarette tax policies based on international best practice using data from the World Health Organization from 2014-2018, read a press release from advocacy group PROGGA (Knowledge for Progress) on Saturday.

"The Scorecard shows considerable untapped potential for cigarette tax increases to raise revenue for a Covid-19 recovery and importantly, prevent premature deaths and promote a healthy and productive workforce," said Frank J Chaloupka, director of Tobacconomics and lead author of the scorecard.

"The complex tiered cigarette tax structure in Bangladesh has significantly contributed to a reduced score for Bangladesh on this scorecard. Bangladesh must reduce the number of tiers for the purpose of cigarette taxation, introduce specific excise taxes and significantly increase its existing excise taxes on all tobacco products to save lives and raise much needed revenue," said Dr Qazi Kholiquzzaman Ahmad, eminent economist and the convener of National Anti-Tobacco Platform.

"According to the World Health Organization, lungs hooked on tobacco are at greater risk of Covid-19. In Bangladesh, 37.8 million adults use tobacco and 41 million people fall victim to second-hand smoke in their own homes. This huge part of population, victims of direct or indirect tobacco use, is currently at grave risk of severe [novel] coronavirus infection," said Dr Mahfuz Kabir, research director of Bangladesh Institute of International and Strategic Studies.

"Low prices of tobacco products are the main reason behind this. Increased taxes on tobacco products will reduce their consumption and generate much needed revenue to bear [novel] coronavirus related medical expenses and implementation of government stimulus packages," he added.

About 126,000 people die every year in Bangladesh from tobacco use and the economic burden from tobacco use amounted to Tk30,500 crores in 2017-18 which is 1.4% of Bangladesh's total GDP, reads the press release.

In addition, the ongoing Covid-19 pandemic has created a major dent in Bangladesh's GDP growth. Reforming tobacco taxes provides a quick and easy way for Bangladesh to raise much needed revenue for economic recovery.

According to the advocacy group, tobacco taxes are the single most effective way to minimise the negative health and economic impacts of tobacco consumption. The best way to do this is through a uniform specific excise tax that comprises at least 75% of the retail price and is automatically updated to stay ahead of inflation and income growth.