'Faulty' tax system raises smokeless tobacco use

Consumption of health-hazardous smokeless tobacco items is gradually increasing in the country despite substantial hike of tax, as producers of these items are somehow escaping from taxmen.

Experts said 'faulty' tax collection system is the major reason behind poor collection of revenue from the products.

'Gul', 'jarda', 'sadapata' and 'khainy' are among the smokeless tobacco items that are largely consumed by people of this region.

The National Board of Revenue (NBR) has kept tax rate on these products unchanged in the budget for current fiscal year (FY), 2015-16, while tax on other smoking tobacco products has been increased slightly.

Currently, there are 15 per cent Value Added Tax (VAT) and 60 per cent Supplementary Duty (SD) on the products.

Talking to the FE, a tax official said the government did not feel any necessity to raise tax on smokeless tobacco products, as their tax rates are quite high now.

"Although the government is increasing tax on these items every year, revenue collection from the sector still remains poor," he added.

In 2013-14, the government received tax worth Tk 10 million from 'jarda', while Tk 5.0 million from 'gul'.

In 2014-15, total expenditure on consumption of smokeless tobacco products was Tk 16.50 billion. But the government earned only Tk 143.6 million tax from the sector, which is less than 1.0 per cent of the total expenditure, according to NBR data.

The smokeless tobacco products have been produced informally, making it difficult for the taxmen to find out their factories, the tax official added.

Professor Dr Sohel Reza Chowdhury, head of Department of Epidemiology & Research, National Heart Foundation Hospital & Research, said there should be a mechanism to collect tax properly from chewing tobacco items.

"The number of the factories is high, and their products are very cheap for the low-income group of people."

On ingredients of the 'pan-masala' that many restaurants are offering after meal, he said no study has been conducted so far in this regard.

Dr Sohel Reza said the government should impose specific excise tax instead of the existing taxes on smokeless tobacco products.

The anti-tobacco groups and health experts demanded imposition of Tk 150 tax on each 100 gram packet and pot of smokeless tobacco items. They also demanded to introduce cigarette-like band-roll system for these.

At present many restaurants are offering imported smokeless tobacco products after meal. Packets of these products do not contain names of ingredients. But, there is a concern from health experts that these items are mostly made using flavour of 'jarda'.

Also, many roadside and makeshift stalls have recently increased their volume of selling smokeless tobacco items, mainly 'gul', to meet demand of consumers.

Asked about illegal sale of the tobacco items, a salesman in the capital's Paltan area said there is a large 'gul' selling market at Chalkbazar, where law-enforcing agencies do not intervene.

Health experts said Bangladesh and India are at high risk of health hazards from smokeless tobacco items. Dr Moarrof Hossain, director general of National Institute of Cancer Research and Hospital, said one of the major reasons of oral cancer is use of these items.

"The culture of offering smokeless tobacco items at home and restaurants should be checked through motivation."

Dr Hossain said the institute has started a motivation programme for patients and their relatives to stop use of these products.

In April 2013, the Jatiya Sangsad passed the Tobacco Control Act (Amendment) Bill, including smokeless tobacco items under the definition of tobacco.

In 2008-09, the government first brought smokeless tobacco products under tax-net.

Source: thefinancialexpress, 14 Aug,2015