After four years, the government has decided to increase tax on biri. Cigarette price has also been increased in the current budget. Rate of supplementary duty (excise tax) on biri has been increased from 20% to 30%. Moreover, the ‘tariff value’ (used as the base price for taxation)
has been hiked from Tk. 3.16 to Tk 3.88 (for packet of 25 biris).The trend of giving benefits to cigarette companies in the name of increasing price continues. The proposal of increasing the value of price slabs, instead of raising tax rates, will please the cigarette manufacturers more than the anti-tobacco activists. The table below shows the changes in price slabs of cigarettes:
In addition, the corporate income tax on cigarette companies has been increased from 35%, to 40%, for ‘publicly traded companies’ and from 42.5% to 45% for ‘non-publicly traded companies’.
Tax rate on ‘unmanufactured tobacco’ has been increased from 60% to 100%, and the rate on cigars, cheroots and cigarillos, containing tobacco, has been increased from 100% to 150%. These products, however, are rarely consumed in Bangladesh.
Increased tax on biri is a significant change, even though it is still not enough to make biri unaffordable for the poor, who are the main consumers, anti-tobacco activists’ organisation PROGGA said.
PROGGA also said that there had been no increase on biri taxes over the past four years. This was admitted even by the finance minister who said, “Considering the interest of the biri industry workers, no reform or change in tariff value and tax structures of handmade biri, has been brought about over the past four years.”
The PROGGA said that the finance minister deserves praise for his statement, as it proves the claim of the biri factory owners and lobbyists who have been continuously propagating that taxes on biri have been disproportionately increasing every year.
The finance minister has been silent for the second consecutive year on taxing smokeless tobacco. Overall, the picture of tobacco taxation in the proposed budget (2013-14) is not satisfactory, said Taifur Rahman, Bangladesh Representative of Campaign for Tobacco Free Kid.
Again, the rate of supplementary duty on smokeless tobacco products has been kept unchanged, although it is essential to increase the prices of these products for effective tobacco control, he said.
He slammed the finance minister saying that that the minister has presented a tobacco control rationale behind this, but the proposal is not likely to have any impact on the prices of tobacco products. Still the increase in corporate income tax on cigarette companies should be applauded.
Through these measures, tobacco-control activists demand to increase tax (supplementary duty) rates on all tobacco products to 70% has been ignored again, Taifur said.
-With The Independent input
