Bangladesh: Cigarette tax structure far below int’l standard

Bangladesh has got an overall score of 2.38 out of 5 possible points as per the International Cigarette Tax Scorecard by Tobacconomics.

Tobacconomics, based at the University of Illinois at Chicago's Institute for Health Research and Policy, released the first edition of the scorecard, assessing the performance of cigarette tax policies in over 170 countries including Bangladesh.

Bangladesh’s score is slightly higher than the global average of 2.07, but there is an ample room to improve when compared to the top performing countries (4.63), reads a press release.

The top performing countries are Australia and New Zealand, which reflect their high, uniform specific cigarette excise taxes with regular increases that have significantly reduced the affordability of cigarettes.

The Tobacconomics scorecard assesses countries’ cigarette tax policies based on international best practice using data from the World Health Organization from 2014-2018.

Nearly half the countries scored less than two out of the five-point maximum. There has been little improvement between 2014 and 2018: the global average score rose only slightly from 1.85 in 2014 to 2.07 in 2018.

Bangladesh had significantly improved its score on cigarette taxation policy from 0.87 in 2014 to 2.38 in 2018 but improvements are needed in the tax structure and prices of cigarettes.

“The Scorecard shows considerable untapped potential for cigarette tax increases to raise revenue for a Covid-19 recovery and importantly, prevent premature deaths and promote a healthy and productive workforce,” says Tobacconomics director and lead author of the scorecard, Frank J Chaloupka.

“The complex tiered cigarette tax structure in Bangladesh has significantly contributed to a reduced score for Bangladesh in this scorecard,” said Dr Qazi Kholiquzzaman Ahmad, eminent economist and convener of the National Anti-Tobacco Platform.

“Bangladesh must reduce the number of tiers for the purpose of cigarette taxation, introduce specific excise taxes and significantly increase its existing excise taxes on all tobacco products to save lives and raise much needed revenue.”

“According to the World Health Organization (WHO), lungs hooked on tobacco are at greater risk of Covid-19. In Bangladesh, 37.8 million adults use tobacco and 41 million people fall victim to second-hand smoke in their own homes. This huge chunk of population, victims of direct or indirect tobacco use, are currently at grave risk of severe coronavirus infection,” said Dr Mahfuz Kabir, research director of the Bangladesh Institute of International and Strategic Studies (BIISS).

“Low prices of tobacco products are the main reason behind this. Increased taxes on tobacco products will reduce their consumption and generate much needed revenue to bear coronavirus related medical expenses and implementation of govt. stimulus packages.”

About 126, 000 people die every year in Bangladesh from tobacco use and the economic burden from tobacco use amounted to Tk 30,500 crores in 2017-18 which is 1.4% of Bangladesh’s total GDP.

In addition, the ongoing Covid-19 pandemic has created a major dent in Bangladesh’s GDP growth. Reforming tobacco taxes provides a quick and easy way for Bangladesh to raise much needed revenue for economic recovery.

Tobacco taxes are the single most effective way to minimise the negative health and economic impacts of tobacco consumption.

The best way to do this is through a uniform specific excise tax that comprises at least 75% of the retail price and is automatically updated to stay ahead of inflation and income growth, the release added.