​Big cheers for tobacco lobby

Rarely in a country these days do governments miss a chance to tax tobacco products, but Bangladesh must be an exception.

Anti-tobacco campaigners say Finance Minister AMA Muhith brought cheers to the tobacco lobby on Thursday by keeping the cigarettes price same.

Muhith in his proposed 2015-2016 budget on Thursday acknowledged the detrimental effects of “cigarette”, but restructured the prices of the top three categories of the cigarettes.

To everyone’s dismay, the finance minister did not utter a word on smokeless tobacco like Zarda that Bangladesh law defines as injurious as smoking.

He also lifted the 1 percent health surcharge imposed on tobacco last year.

The proposed budget has frustrated the anti-tobacco campaigners.

ABM Zubair, Executive Director of an anti-tobacco group Progga, told bdnews24.com that people’s purchasing power had increased, as the finance minister said, but the supplementary duty of cigarettes had not increased in line with that.

“Ultimately cigarettes will be cheaper for the people,” he said. “This budget will fail to deter smokers,” he said.

The price slab for 10 sticks cigarette was Tk 90 and above, but in the proposed budget the finance minister set it to Tk 70 and above.

He, however, raised supplementary duty to 63 percent from the 61 percent for this highest tier.

In the medium brand, the price slab for 10 sticks has been set at Tk 40-69 from Tk 50-54. But the supplementary duty for this brand remained the same, 61 percent.

The slab for low-brand cigarettes has been set at Tk 20-39 from the current Tk 32-35 with the supplementary duty staying the same.

The lowest brand has only been raised to Tk 19 from Tk 16, with a five percentage point rise in supplementary duty.

The finance minister acknowledged that the tobacco taxation “does not go with the spirit of the market economy”.

But he said it had been a tradition of the government to fix the price limit of cigarette for the sake of revenue collection.

The minister said he “considered the interest of the local bidi industry workers” and that’s why “did not bring any notable reform or changes in tax structures of bidi sector”.

Currently, the prices of 25 sticks of non-filter and 20 sticks of filter bidi are Tk 6.14 and Tk 6.92. Those have been raised only to Tk 7.06 and Tk 7.98 respectively.

The minister, however, acknowledged that due to its easy availability, a large number of people smoked bidi and became vulnerable to health risks.

The corporate tax rate for cigarette business has been made uniform for all companies at 45 percent.

Earlier, big listed companies had to pay 40 percent corporate tax.

“This rate has been increased for controlling tobacco industries. But in reality, it will not impact cigarette prices,” Zubair said.

Tobacco business was "a very tricky business across the world", he observed.