The opportunity to raise revenue by taxing cigarettes has not been exploited

Non-governmental organization Development Coordinating responded that the budget did not take advantage of the opportunity to reduce smoking rates and increase government revenue by imposing a tax on cigarettes.

The organization responded in a post-budget statement on Thursday (June 6).

In a statement, development coordination leaders said more than 70 percent of the market is occupied by cheap low-end cigarettes. The budget proposed to increase the retail price of each ten-pack of low-grade cigarettes from Rs 45 to Rs 60. But this price has been increased by only 5 rupees to 50 rupees. On the face of it this price seems to have gone up by 11 per cent, but if inflation is taken into account it will be seen that the price of low end cigarettes has not actually gone up. A supplementary duty of 58 per cent is levied on this tier of cigarettes while a supplementary duty of 65 per cent is levied on cigarettes of other higher tiers.

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  • Tobacco will be cheaper and more readily available

According to the statement, the price of each ten-pack of medium, high and premium cigarettes has been increased by Tk 3, Tk 7 and Tk 10 to Tk 70, Tk 120 and Tk 160 respectively. In these cases too, the anti-tobacco proposals were not reflected. Apparently the prices of these cigarettes have been increased by 4 to 7 percent, but considering the inflation rate of 10 percent, these three tier cigarettes are actually more affordable than before.

Even if prices are not increased at the desired rate, cigarette sales may decline by 0.3 percent compared to the current year. However, if the recommendations of anti-tobacco civic organizations are implemented, cigarette sales could be reduced by about 2 percent in the coming year compared to the current year. Due to this proposed increase in the price of cigarettes, an additional revenue of Rs. 4 thousand crores (11 percent increase) can be obtained in the coming year compared to the current year.