Public Health on Top

The recent govt. strategies regarding the tobacco taxation suggest that the policymakers of Bangladesh may feel quite uncomfortable in adopting modern and updated taxation methods and leaving the age-old less effective methods behind. While the govt. abolished the old traditional ‘ex-factory price’ system for smokeless tobacco (SLT) products in the final budget for the FY 2018-19, it has adopted another similarly old and ineffective method in this sector, known as ‘tariff value’ system. This new system will give the SLT producers unprecedented opportunity to expand their trade. This move, on the other hand, will curtail the govt.’s revenue from this sector to a significant extent. In the proposed budget, the govt. would get Tk. 19.76 and the SLT producers Tk. 5.24 from the price for 10 grams of jarda and gul because of the adoption of MRP system. But in the final budget, the govt. has turned its back to the MRP system and set the tariff value of jarda and gul at Tk. 12 and Tk. 6 respectively and imposed a 100% supplementary duty. Hence, the increase in govt. revenues, compared to the proposed budget will get reduced by 54 percent and the earnings of tobacco companies will get increased by 118 percent for the same amount of products. Moreover, as the condition of mandatory minimum retail price has been lifted, the desperate SLT producers will increase the sale by compromising their unnatural rise in income to some extent and lessening the expected increase in their SLT products for the consumers. So, the prices of jarda and gul may not increase as expected. The depletion in the use of SLT at the consumer level and the protection for public health will not be met as expected
The close relationship between Bangladeshi policymakers and big guns of SLT industry is nothing new. Bestowing the ‘Kar Bahadur’ title on Muhammad Kaus Mia, a SLT producer, and awarding him as the ‘Best Taxpayer’ year after year suggest so. On the other hand, the FM’s declaration to shut down the bidi industry by 2020 is now generating quite the opposite result. As a response to the FM’s declaration, an alliance has been formed with bidi factory owners and workers, influential politicians, Members of Parliament, cultural personalities, university teachers which is resisting any attempt to shut down the industry and at the same time, raising demands to declare the bidi industry as a cottage industry and to withdraw taxes from this sector. This is the price the country has to pay for the FM’s hasty decision to neglect the long-proven tobacco control method of raising taxes and price steadily and curbing the demand. This will further thwart the vision of achieving a tobacco-free country by 2040.