Bangladesh: Tobacco taxes to fund fight against coronavirus and economic recovery

In Bangladesh, experts on Tuesday, June 2, 2020, urged the government to increase taxes on tobacco products to discourage consumption and generate additional tax revenue.[1].

According to them, 40 million adults in the country are at risk of contracting COVID-19 and suffering serious complications, which can even lead to death.

Furthermore, economists and MPs have put forward the idea that increasing taxes on tobacco products would generate additional tax revenue that could be reinvested in the fight against the coronavirus, as well as in a plan to revive the economy, which has been significantly impacted by the pandemic. This proposal echoes the situation in Pakistan, where the public authorities decided at the beginning of April to allocate financial resources to the fight against COVID-19, with the help of an increase in taxes on tobacco products and sodas.

In addition to these tax and tariff measures, a surcharge of 3% on the retail prices of tobacco products could be imposed. If implemented, these measures would result in a tax revenue of 11,000 crore takas, or approximately 1.15 billion euros in additional revenue.

Dr. Rumana Huque, a professor in the Department of Economics at the University of Dhaka, also points to the low taxation of new smokeless tobacco products, which half of Bangladeshi smokers have now switched to. For this reason, she believes it is essential that taxes on these products align with those on conventional cigarettes.

Referring to Prime Minister Sheikh Hasina's pledge to make Bangladesh tobacco-free by 2040, Member of Parliament Sabre Hossain Chowdhury said, "If this year's national budget does not propose a fundamental change in the way tobacco products are taxed, and if we miss this opportunity to generate additional revenue, with the health situation we have, I am afraid I cannot support this budget for ethical and moral reasons."

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[1] United News of Bangladesh, “Raise prices of tobacco goods: Experts to govt, June 2, 2020

http://www.unb.com.bd/category/Bangladesh/raise-prices-of-tobacco-goods-experts-to-govt/52452

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