Dhaka correspondent :: A pre-budget press conference titled ‘The Tobacco Tax We Demand’ was held at the conference lounge-3 of National Press Club on May 3, 2018 (Thursday) on the initiative of PROGGA and Anti-Tobacco Media Alliance (ATMA) and in association with other anti-tobacco organizations including National Heart Foundation Bangladesh, Dhaka Ahsania Mission, Association for Community Development (ACD), Young Power in Social Action (YPSA) and Tamak Birodhi Nari Jote (TABINAJ). A written statement was presented at the press conference by Nadira Kiron, Chief Reporter ATN Bangla and co-convener of ATMA. Dr. Nasiruddin Ahmed, former Chairman of National Board of Revenue (NBR) was the chief guest at the event. The press conference was presided over by National Professor Brig. (Rtd.) Abdul Malik, founder and president of National Heart Foundation of Bangladesh. Mortuza Haider Liton, Chief Crime correspondent, BDNews24.com and convener of ATMA; Shafiqul Islam, Bangladesh Country Advisor, Vital Strategies; Dr Syed Mahfuzul Huq, National Professional Officer (NCD), WHO; Dr. Mahfuzur Rahman Bhuiyan, Grants Manager, Campaign for Tobacco Free Kids (CTFK); Syed Mahbubul Alam, Technical Advisor, The Union and ABM Zubair, Executive Director, PROGGA were among others present at the event.

In his speech delivered in the press conference, Dr. Nasiruddin Ahmed said, ‘It is the issue of public health which should be given priority while imposing taxes on tobacco products, not the additional revenue that comes from it.’ He further says, ‘Tobacco companies are claiming that imposing increased taxes on their products will result in an influx of smuggled cigarettes. But the reality is the price of tobacco products is much higher in neighboring countries. So the claims of these tobacco companies are entirely baseless.’ National Professor Brig. (Rtd.) Abdul Malik said, ‘To achieve a tobacco-free Bangladesh by 2040, we need to discourage the use of tobacco by increasing tobacco tax.’ Speakers underpinned the importance of increasing tobacco tax on the basis that tobacco products are cheap in Bangladesh and it is getting cheaper over the course of time. Besides, the excessively complicated tobacco tax structure creates scope for tax evasion. The vast difference in prices across tobacco products and brands gives the consumers an opportunity to switch to cheaper tobacco products or brands, which eventually lessens the effectiveness of tobacco taxation. So, the press conference presented following proposals and recommendations to be realized in the upcoming budget for FY 2018-19:

Budget Proposals:

1. Bringing the number of price slabs down to two (low and high): Eliminate the differential tax between local and multi-national corporation (MNC) brands in the lowest tax tier. Combine the high and premium tiers under a single tier (high). Set the minimum price for the low tier at no less than 50 taka per 10 sticks and raise the ad valorem tax to 60%. Similarly, set the minimum price for the high tier (high and premium) at minimum 100 taka per 10 sticks and keep the ad valorem tax on the high tier at the existing 65%. At the same time, introduce a specific tax of 5 taka per 10 sticks for all cigarettes.

2. Elimination of distinction between filter and non-filter bidis and setting the minimum price for 25 bidis at 30: Eliminate the distinction between filtered and non-filtered bidis. Set the minimum price at 30 taka per pack of 25 sticks. Raise the ad valorem tax to 45% of price and add a specific tax of 6 taka per pack of 25 sticks.

3. Elimination of Ex-Factory Price in Smokeless Tobacco (Jarda and Gul): Change the tax base to the retail price. Set a minimum retail price of 50 taka per 20 grams. Raise the ad valorem tax to 45% of price and add a specific tax of 10 taka per 20g.

4. VAT on retail price: A 15% VAT (on retail price) will still be applicable to all tobacco products (smoking and smokeless).

If the aforementioned proposals are adopted, it will encourage nearly 6.42 million current adult smokers to quit (3.07 million cigarettes smokers and 3.35 million bidi smokers); will reduce the prevalence of cigarette smoking by 2.7 percent and the prevalence of bidi smoking by 2.9 percent; will reduce premature deaths by 2.01 million among current smokers in the long-term (1.08 million cigarette smokers and 938,650 bidi smokers); and will raise between BDT 75 billion and 100 billion (or 0.4 % of GDP) in additional tax revenue. This additional revenue can be used to fund several new or existing programs to reduce the harms of tobacco use and promote healthy lives.

Recommendations

Introduce a specific excise tax system on tobacco products in the long run, replacing the current ad-valorem system.

• Simplifying the tax system on tobacco products by following recommendations:

Gradually marketing all forms of tobacco products in same quantity packets/containers/cans (i.e. same number of sticks or same weight in all packets)
Reduce the number of tiers for cigarettes and also reduce the difference of taxes between the tiers

• Increase the specific excise on a regular basis in accordance with the inflation rates and income growth;

Formulate / implement a simple, effective, and long-term (5 years) tobacco tax policy that ensures increased revenue and decrease tobacco use over the period.

• Impose a ban on the production, importation, and marketing of E-cigarettes and other heat-not-burn (IQOS) tobacco products.
• Facilitating tobacco control, health, education and training to battle non-communicable diseases from the fund collected from additional tobacco taxation. Increasing Health Development Surcharge to 2 percent can be an effective initiative in this regard.