Unnayan Shamannay, a civil society, has criticised the budget for FY 2024-25 for failing to implement effective cigarette taxation that could simultaneously reduce cigarette use and increase government revenue.
Despite extensive collaboration between national civil society organisations and international researchers to develop robust cigarette taxation proposals, these recommendations were largely ignored in the proposed budget, a press release said.
Over 70% of cigarettes used in Bangladesh are low-tier cigarettes.
Anti-tobacco stakeholders had proposed increasing the price of a 10-stick pack of low-tier cigarettes from Tk45 to Tk60. The budget, however, only raised the price by Tk5, bringing it to Tk50 per pack.
While this represents an 11% increase, the prevailing 10% inflation rate means low-tier cigarettes will become more affordable in the coming fiscal year.
On a positive note, the supplementary duty on low-tier cigarettes has been raised from 58% to 60%, a move welcomed by anti-tobacco activists who had advocated for a 63% increase.
This change is seen as a step towards closing the gap between the supplementary duties on low-tier and higher-tier cigarettes.
The budget also increased the prices of 10-stick packs of medium-, high-, and premium-tier cigarettes by Tk3, Tk7, and Tk10, respectively.
The new retail prices will be Tk70, Tk120, and Tk160.
However, these increases, ranging from 4% to 7%, fall short of the recommendations from anti-tobacco activists and are expected to be offset by inflation, making these cigarettes more affordable next year.
Despite the modest price hikes, cigarette sales are projected to decrease by 0.3% in the coming fiscal year.
If the anti-tobacco proposals had been implemented, sales could have dropped by almost 2%.
The government expects to earn an additional Tk40 billion in revenue from cigarette sales, an 11% increase over the current fiscal year.
This figure could have reached Tk 100 billion, a 28% increase, had the proposed price hikes been adopted.
Smoking prevalence is anticipated to decrease from 15.1% to 14.6% due to the budget's measures.
However, the decline could have been steeper, reaching 13.8%, if the anti-tobacco organisations' proposals were incorporated.
