‘Review tax on tobacco products’

Staff Correspondent

25 June, 2019 12:00 AM printer

Speakers at a meeting on Monday urged the government to review tax on tobacco products imposed in the proposed budget.

They observed that the government will lose huge revenue if the national budget is implemented with proposed tax on tobacco products while the income of the tobacco companies will increase.

National Heart Foundation of Bangladesh and the 'Tobacco-Free Bangladesh Platform' jointly organised the meeting on 'Achieving Tobacco-Free Bangladesh and SDG Targets: Tobacco Tax Review in the proposed Budget' with Parliament Members Club.

The meeting was organized with a view to create pressure on government to review the tax on tobacco products proposed in the budget for the fiscal year 2019-20.

Speakers at the meeting said that the tax on tobacco products in the proposed budget is neither favourable for public health nor play any vital role in reducing the use of tobacco because of the nominal price rise of lower level cigarettes.

The convenor of the tobacco-free Bangladesh Platform and the President of Parliamentary Standing Committee on Environment, Forests and Climate Change Ministry, Saber Hossain Chowdhury, MP delivered the welcome address.

He said that in the proposed budget, the interests of tobacco companies have gained prominence rather than public health. Increasing the price of tobacco products will result in the profit of tobacco companies.

Saber Hossain Chowdhury said that according to the announcement of the Prime Minister Sheikh Hasina, tobacco control is necessary to make Bangladesh tobacco free by the 2040 and achieving the target of SDGs and urged the lawmakers to play a strong role to this end.

Professor Sohel Reza Chowdhury, Head of Department of Epidemiology and Research of National Heart Foundation Hospital and Research Institute presented the keynote paper highlighting the health and economic losses of tobacco.  He said that in the proposed budget, due to the very little increase in the price of lower tier cigarettes, the government revenue will be reduced by about Tk 2 billion, keeping the supplementary duty unchanged.

Because the price of low-level cigarettes raised only Tk 2 per packet, many users will be shifted from middle-tier to lower tier cigarettes. As a result, the use of tobacco products will not be reduced. And this level shifting will reduce revenues, he added.

Apart from this, Sohel Reza Chowdhury said in the Finance Bill 2019 under section 76, the original VAT Act 2012's section 46 has been replaced with new 46, creating the opportunities for the tobacco industries to have huge amount of input tax credit support. “Thus, the government is going to lose around Tk 400 crore.”

He said on the other hand, due to the tax exemption of 10 percent and 25 percent tax on import of unprocessed tobacco and processed tobacco products, huge revenue will be lost, while tobacco cultivation will increase.  President of Parliamentary Standing Committee on the Ministry of Home Affairs, Shamsul Haque Tuku MP, President of Parliamentary Standing Committee on Land Ministry Mokbul Hossain, President of Parliamentary Standing Committee on Social Welfare Ministry Rashed Khan Menon, President of Parliamentary Standing Committee on Public Accounts Rustam Ali Faraji MP, Rezaul Karim Bablu, Mohammad Shahiduzzaman, Fazle Karim Chowdhury, Md. Faridul Huq Khan and Abdul Mannan were also present at the meeting.

Among others, National Professor Brigadier (Rtd) Abdul Malik, Founder and President of the National Heart Foundation of Bangladesh, Former NBR chairman Nasiruddin Ahmed and representatives from different anti-tobacco organizations were present at the meeting.