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Achieving Tobacco-free Bangladesh and SDG targets Tobacco tax review in the proposed budget

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Considering the negative impact of tobacco on public health and economy, Honorable Prime Minister has an announcement to make Bangladesh tobacco free by 2040. In line with implementation of her announcement, a meeting has been held in Parliament Members Club on Monday, 24 June 2019 to review the recommended tax on tobacco products in the proposed budget of 2019-20 fiscal year.

In collaboration with the National Heart Foundation of Bangladesh, the 'Tobacco-Free Bangladesh Platform' organizes this meeting on 'Achieving Tobacco-Free Bangladesh and SDG Targets: Tobacco Tax Review in the proposed Budget' with Members of Honorable Parliament Members.

Speakers at the meeting said that the tax on tobacco products in the proposed 2019-20 budget is not favorable for public health. It will not play any role in reducing the use of tobacco as a result of nominal price rise of lower level cigarettes. Besides, if the proposed budget is implemented, the government will lose huge revenue from the tobacco sector, while the income of the tobacco companies will increase.

The convenor of the tobacco-free Bangladesh Platform and the President of Parliamentary Standing Committee on Environment, Forests and Climate Change Ministry, Mr. Saber Hossain Chowdhury, MP delivered the welcome address. He said that in the proposed budget, the interests of tobacco companies have gained prominence rather than public health. Increasing the price of tobacco products by not only raising taxes will result in the profit of tobacco companies. Earlier, Mr. Zahid Malek, Minister for Health and Family Welfare, sent a letter to the Finance Minister to increase the tax on tobacco, but Mr. Saber Hossain Chowdhury claimed that it was not fully implemented. He said that according to the announcement of the Honorable Prime Minister Sheikh Hasina, tobacco control is necessary to make Bangladesh tobacco free by the 2040s and achieving the target of SDGs. He urged the members of the MPs to play a strong role.

Professor Sohel Reza Chowdhury, Head, Dept. of Epidemiology and Research, National Heart Foundation Hospital and Research Institute presented the keynote paper. During this time, he highlighted the health and economic losses of tobacco. He said that in the proposed budget, due to the very little increase in the price of lower tier cigarettes, the government revenue will be reduced by about Tk 2 billion, keeping the supplementary duty unchanged. Because the price of low-level cigarettes raised only Tk 2 per packet, many users will be shifted from middle-tier to lower tier cigarettes. As a result, the use of tobacco products will not be reduced. And this level shifting will reduce revenues. Apart from this, in the Finance Bill 2019 under section 76, the original VAT Act 2012's section 46 has been replaced with new 46, creating the opportunities for the tobacco industries to have huge amount of input tax credit support. Thus, the government is going to lose around Tk 400 crore. On the other hand, due to the tax exemption of 10% and 25% tax on import of unprocessed tobacco and processed tobacco products, huge revenue will be lost, while tobacco cultivation will increase. Which will have adverse effects on environment and agriculture.

President of Parliamentary Standing Committee on the Ministry of Home Affairs, Shamsul Haque Tuku MP; President of Parliamentary Standing Committee on Land Ministry, Mokbul Hossain; President of Parliamentary Standing Committee on Social Welfare Ministry, Rashed Khan Menon; President of Parliamentary Standing Committee on Public Accounts, Rustam Ali Faraji, MP of Pirojpur-3 constituency; MP of Bogura-7 constituency Rezaul Karim Bablu; MP of Meherpur-2 constituency Mohammad Shahiduzzaman; MP of Chattogram-6 constituency Fazle Karim Chowdhury; MP of Jamalpur-2 MP Md. Faridul Huq Khan and MP of Bogura-1 Abdul Mannan were also present at the meeting. They pledged to raise voice in the parliament to take the national policy for tobacco control and raise tax on tobacco products. In addition, they will sit with the PM to discuss the recommendations of Health and Family Welfare Minister, Mr. Zahid Malek. The recommendations include: reduction in the price tier of cigarettes from 4 to 2, supplementary duty 65% on lower tier and 70% on other tier cigarettes, imposing a specific tax of Tk 5 on a 10-stick packet of cigarettes, which will provide additional revenue of Taka 4,000 crore. They will also request the PM to repeal the revision of Article 46 of the VAT Act and reimpose the 10% and 25% export duty on unprocessed and processed tobacco products.

Thus, the MPs agreed to send a letter to the PM demanding raise in tobacco tax and revise the proposed budget. According to this decision, NHFB has drafted a letter and shared it with Mr. Saber Hossain Choudhury MP. He will finalize the letter and then will be sent to all the MPs. After collecting signatures, a small group of the senior and influential MPs will meet the PM before the budget is passed in the parliament and submit the letter to her. They will try to convince her to bring favorable change in proposed budget on tobacco tax.

Among others, National Professor Brigadier (Rtd) Abdul Malik, Founder and President of the National Heart Foundation of Bangladesh; Professor Golam Mohiuddin Faruque, Joint-secretary, Bangladesh Cancer Society; Mr. Abdul Awal, Chairperson, SUPRO, Syed Mahbubul Alam, Technical Advisor, Bangladesh, The Union; Former NBR chairman Dr. Nasiruddin Ahmed and representatives from different anti-tobacco organizations were present at the meeting.