Bangladesh - tax increase on tobacco will be win-win situation..

March 30, 2010 - The government will earn around Tk 1,000 crore (1 crore = 10 million = 10,000,000) more revenue in the next fiscal year if tax on cigarettes and bidis [Bidis or beedies are small, flavored, filterless cigarettes. They consist of shredded tobacco rolled in dried tendu leaves (a broad-leafed plant native to India) and secured with string. They are produced in a variety of flavors, including chocolate, vanilla, cherry, licorice and mango.] is increased by 23 percent to 26 percent, finds a research. Unnayan Shamannay, a nongovernmental research organisation, at a press conference on Tobacco Taxation: Budget 2010-2011 in Perspective released the research report yesterday. (Bangladesh - consuming chewing tobacco is almost double than smoking tobacco..)

Unnayan Shamannay, a nongovernmental research organisation, at a press conference on Tobacco Taxation: Budget 2010-2011 in Perspective released the research report yesterday. Researcher Dr Mahfuz Karim said if the tax is increased by 23 percent on all brands of cigarettes, the prices of the tobacco product will go up by 15 percent, which will help generate at least Tk 903 crore more revenue in the next fiscal year. It will also help reduce cigarette consumption by around 96 crore to 139 crore sticks.

Dr Karim said if the tax is increased by 26 percent on bidi, consumption will come down to 168 crore sticks, and the government will earn around Tk 68 crore additional revenue.

The study shows that the government's total revenue earning was only Tk 5,393 crore annually, whereas health hazard caused by smoking is worth over Tk 10,000 crore in losses.

It also says if bidi factories are closed down after tax enhancement, the government will be able to retrench the jobless labourers easily with alternative employment from the extra revenue earnings.

Krishi Bank Chairman Khondker Ibrahim Khaled said the policy of enhanced taxes on tobacco products will not only discourage smoking, it will uphold the welfare economy in the country.

The Global Adult Tobacco Survey (GATS) Bangladesh Report-2009" showed a total of 41.3 million people in Bangladesh are now in the habit of using tobacco -- either in the form of smoking or chewing. According to the study, which was conducted on 11,200 households by the World Health Organization (WHO) in association with the Bangladeshi government the prevalence of tobacco use in rural areas is 45.1 percent and 38.1 percent in urban area. (Bangladesh - GATS - tobacco use among adults reaches 43.3 percent..)

Bangladesh - Tobacco Economics..

Reference: Higher tax urged on tobacco, Star Business Report, The Daily Star, 3/29/2010.

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