Due to the fatal risks tobacco poses on human health, countries around the world are coming up with strategic plans to reduce tobacco consumption. But Bangladesh—a country with the second-highest rate of smoking prevalence in Asia—has yet to develop an effective plan. One of the ways Bangladesh can discourage tobacco consumption is by bringing changes in the tobacco taxation system. If so, what are those changes? And how effective are they?
To delve into this matter, BIGD launched one of its research reports titled “The Economics of Tobacco Taxation in Bangladesh”, in a report launching event, where among various distinguished guests, Mr M A Mannan, MP, Honourable Minister of the Ministry of Planning, Government of Bangladesh, graced the event as the Chief Guest. Dr Rumana Huque, Professor, Department of Economics, University of Dhaka and Barrister Jahangir Hossain, Member, NBR were present at the report launching event as well.
The current tobacco taxation system in Bangladesh is based on the ad valorem tax structure which, according to critics, is not effective enough to control tobacco consumption. The report proposed to reform this structure by adding specific tax with it. This will increase government revenue and simultaneously reduce tobacco consumption. Additional recommendations included harmonizing tax rates across all tobacco products, reforming and enhancing the implementation of laws of the National Board of Revenue (NBR), and withdrawing incentives such as “Highest Taxpayer” awards for tobacco industries.
