Public Health on Top

Very recently, a multinational tobacco company has launched a massive campaign to increase the prices of low-tier cigarettes, but only by hiking the base price, not the tax rate. The company is demanding a slight increase in the retail price or base price of 10 sticks of low-tier cigarettes to BDT 44-45 from the exiting BDT 39, keeping the tax rate unchanged at the current 57 percent. However, anti-tobacco organizations and experts argued that since the cigarette taxes are imposed on the retail prices, the prescribed arrangement (hiking base/retail prices instead of tax rates) will allow the company to pocket a significant share of additional revenues. It should be noted that the company's current market share in low-tier cigarettes is more than 75 percent (Page No 35, Table A1). Hence, raising retail prices instead of tax rates, as proposed by the multinational company, will only enrich the company coffer without any additional investment or risk. According to anti-tobacco organizations, in the upcoming 2022-23 national budget, the supplementary duty (specific) on 10 sticks of low-tier cigarettes should be 65 percent and retail prices should be BDT 50. This will ensure that the additional revenues generated will go to the government exchequer and not add to tobacco companies' profit.

The National Board of Revenue (NBR) should not be misled by such proposals from tobacco companies and prioritize the Honorable Prime Minister's vision for a tobacco-free country. We must keep in mind that it is impossible to achieve a tobacco-free Bangladesh while keeping companies profitable.