Faulty taxation makes tobacco ‘highly affordable’ in Bangladesh, study finds

To great public health concern, a study finds that tobacco products have become “highly affordable” in Bangladesh due to a “weak” taxation system.

The International Tobacco Control Policy Evaluation Project’s (ITC Project) study found that the price of cigarettes and smokeless tobacco increased between 2009 and 2015, but rapid economic growth in Bangladesh “more than offset these increases”.

This calls for a reform in the tobacco tax system as “tobacco users may switch between tobacco products rather than quit”.

The report, released in Canada recently, came timely for the government as a new budget will be announced in the first week of June and implemented from July 1.

Bangladesh is one the leading tobacco-producing nations and the prices of tobacco here are said to be the cheapest in the world.

The government hikes cigarettes prices in different slabs and supplementary duties imposed on cigarettes vary from 36 percent to 60 in four tiers.

Syed Mahbubul Alam Tahin, technical adviser of The Union, an international organisation which works for lung health, agreed with the study and told bdnews24.com that the tobacco taxation was “very complex” in Bangladesh.

“We need to overhaul the tobacco taxing system. We need to simplify this as our Prime Minister has already called for,” he said.

Prime Minister Sheikh Hasina at the recent South Asia Speakers’ summit in Dhaka called for a strong tobacco tax policy, “simplifying” the current structure.

Tahin said industries were also dodging taxes, taking advantage of the different slabs.

The study report urges policymakers to change the tax system to keep pace with inflation and rising incomes, and to close the gap between prices of various tobacco products.

“A simplified tax system would remove the incentive of switching between tobacco products and instead encourage smokers to quit.”

The World Health Organization has recognised that raising taxes on tobacco products is the most effective measure for reducing consumption and prevalence of tobacco products.

However, affordability, or the price of tobacco products in relation to the income of tobacco users has a large influence on tobacco use.

While increasing prices are known to encourage tobacco users to quit, rising incomes can more than offset price increases resulting in increases in tobacco use.

“It not only encourages higher tobacco consumption, but is likely to induce tobacco users to shift from bidis -- local hand-rolled cigarettes – and smokeless tobacco to cigarettes rather than quitting tobacco use.”

The ITC Bangladesh Report, “The trend in affordability of tobacco products in Bangladesh 2009-2015: Evidence from ITC Bangladesh Surveys” was led by Dr Nigar Nargis, Principal Investigator of the ITC Bangladesh Project and Director of Economic and Health Policy Research at the American Cancer Society.

Michal Stoklosa and Jeffrey Drope of the American Cancer Society; Geoffrey T Fong (ITC Project Founder and Principal Investigator), Anne CK Quah, and Pete Driezen of the University of Waterloo; Frank J Chaloupka and Ce Shang of the University of Illinois at Chicago; and AKM Ghulam Hussain at the University of Dhaka were the collaborators of the study.

The evidence presented in the report is based on findings from the International Tobacco Control Policy Evaluation Project (ITC Project), the first-ever international cohort study to evaluate the psychosocial and behavioural effects of tobacco control policies.

The study used nationally representative self-reported data from a cohort of tobacco users and non-users aged 15 years and older from the ITC Bangladesh Survey, conducted in four waves between 2009 and 2015 to measure the affordability of tobacco products.

The study measures affordability based on individual self‐reported price and self‐reported household income group and summarises the affordability index over the population.