Public Health on Top

The proposed budget for FY 2021-22 has kept the prices and taxes of tobacco products almost unchanged. From the very beginning of the budget formulation process, tobacco companies have tried to influence the government using different strategies and have been quite successful to that end. The analysis of the proposed budget for 2021-22 FY shows that it has kept the prices and taxes on the low and medium tier cigarettes unchanged which respectively constitute around 72 and 16 percent of Bangladeshi cigarette market. In high and premium tiers, the prices for 10 sticks have been raised by only Tk. 5 and Tk. 7 (5.5 percent hike), setting the prices at Tk. 102 and 135 respectively. The increase (5 percent) is very negligible compared to the increase in per capita income of the country (9 percent) which would inevitably make cigarettes more affordable. The existing faulty multi-tiered ad-valorem tax structure is also increasing the tendency to switch to cheaper cigarette brands, making the tobacco companies the ultimate and only gainers. According to Global Adult Tobacco Survey (GATS), 2017, between 2009 and 2017, there has been a 1.5 million increase in the number of cigarette users. The budgetary measures, as proposed, would increase the number of smokers again, putting public health in a precarious position. Since the prices of bidi and widely used smokeless tobacco (jarda and gul) have also been kept unchanged, it would undoubtedly increase use of these products and put the low-income people into greater health risk.
Imposing higher taxes on tobacco products is a pro-poor measure. The tendency of quitting tobacco with price hike is comparatively high among the poor demographic. It also reduces premature deaths and medical expenses from tobacco-related diseases. Thus, it becomes possible for poor households to recover the loss of productivity and other income losses incurred from tobacco use. Implementation of budget proposals of anti-tobacco organizations, i.e. increasing prices of all tobacco products through imposing specific taxes will encourage 1.1 million people to quit smoking, prevent premature deaths of 390,000 current adults and 400,000 current youth, and earn BDT 3400 crore in additional revenue from cigarettes as supplementary duty, health development surcharge and VAT. It would also expedite the realization of the vision of a tobacco-free Bangladesh by 2040, as declared by the Honorable Prime Minister.