Substantial tax hike best option to cut tobacco use: Experts

 Raising tax substantially on tobacco products in the upcoming budget can help cut tobacco consumption in the country and protect public health from its adverse impacts, say economists, reports UNB.
"There's no doubt if tax on tobacco products is increased substantially, tobacco users will be forced to quit smoking and its use because of their high prices," said eminent economist Prof Qazi Kholiquzzaman Ahmad.
He said if one gets addicted to tobacco, he or she cannot quit it overnight, but when the prices of tobacco products go up significantly, tobacco users are compelled to minimise their use considering the cost.
Bangladesh is among the top 10 tobacco-consuming countries in the world. Over 58 per cent of men and 29 per cent of women use tobacco in one way or the other. In 2012, an estimated 46.3 million adults used some form of tobacco products, smoked or smokeless, according to World Health Organisation (WHO).
Most smokers are male — 28.3 per cent of adult men smoke manufactured cigarettes and 21.4 per cent smoke bidis. Smokeless tobacco use is also substantial across both genders, with 26.4 per cent of men and 27.9 per cent of women using some form of smokeless tobacco like jarda, gul and sada pata.
According to a 2014 report of the WHO, Bangladesh is one of the countries in the world where cigarette price is the lowest. The prices of bidi and smokeless tobacco are also the lowest, while tobacco products are getting cheaper here day by day.
A recent study shows that the overall cigarette and bidi consumption is on the rise in Bangladesh, with cigarette smoking rising by over 40 per cent in between 1997 and 2010, while that of by over 80 per cent during the period.
Kholiquzzaman said now people's earning rising, but the prices of tobacco products are not increasing.
He demanded the removal of price slabs of cigarette during taxation in the upcoming budget of fiscal 2016-17 as the price slab system helps the tobacco companies dodge tax.
"I suggest the removal of price slabs of cigarette- for two reasons — it creates scope of price manipulation and smokers go down to lower slabs after the increase in cigarette prices," the economist said.
The study titled 'the Economics of Tobacco and Tobacco Taxation in Bangladesh', conducted by economist Prof Abul Barkat of the Human Development Research Centre and others, reveals that taxing all cigarette brands at a specific tax rate of Tk 34 per 10 sticks (70 pc of retail price) could lead nearly 7.0 million current smokers to quit and prevent 7 million youth from initiating smoking, preventing 6.0 million premature deaths and raising additional excise revenues of Tk 15.1 billion (US$ 200 million).
The study says taxing all bidis at a specific tax rate of Tk 4.95 per pack (40 pc of average prices) could lead 3.4 million adult bidi smokers to quit and prevent 3.5 million youth from initiating bidi smoking, preventing 2.5 million premature deaths and raising additional excise revenues of Tk 7.2 billion (US$ 87.5 million).
Prof Abul Barkat in their study says the cigarette tax structure in Bangladesh is complicated, with a tiered structure which imposes different ad valorem taxes based on retail cigarette price slabs.
"Bidis are taxed at a much lower rate. Cigarette prices here are among the lowest in the world. Real cigarette prices have been falling in recent years since the incomes of people have increased over the past decade."
Dr Muinul Islam, a professor of economics at Chittagong University, said considering the adverse impacts of tobacco, its use should be discouraged in the country imposing high tax on tobacco products.
Bangladesh faces considerable health and economic consequences from tobacco. About 57,000 deaths are attributed to tobacco use each year.  About 382,000 others get lamed annually due to tobacco use.
The government has to spend a large amount of money each year on treatment for diseases caused by tobacco. In 2004, the study shows, nearly Tk 51 billion were spent on the treatment of the diseases caused by smoking, including Tk 5.8 billion spent on treating non-smokers exposed to tobacco smoke. The tobacco costs over 3 per cent of total GDP of the country each year.
"Tobacco is the key reason behind non-communicable diseases in Bangladesh. If we can't prevent tobacco use, we'll be a lamed-nation in the days to come," National Professor Brig (retd) Abdul Malik told a press conference recently.
He said tobacco largely contributes to the non-communicable diseases like heart disease, hypertension, high blood pressure and cancer that people are being affected in Bangladesh. [Read More]

Source: The Financial Express


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