Abstract:
Background and challenges to implementation: Due to influence of British American Tobacco Bangladesh (BATB) and other Tobacco Industries (TI), existing tierbased tax system benefited TI’s and tax evasion became major obstacle on tobacco control. BATB is largest multinational tobacco industry owned more than 64% market share of tobacco in Bangladesh. Government of Bangladesh (GoB) and government owned different bodies has about 10% share and 5 high officials from GoB represents board of directors of BATB.
Intervention or response: Identify weaknesses, gaps and challenges of tax system for cigarettes and how existing system benefitted TI’s, rather than the government. We have collected BATB’s financial statements for from 2009 to 2018. Production of cigarettes, net-profit and annual tax submitted to government by BATB were analyzed to understand tier-based tax system for cigarettes and its effects on TIs net-profit and reduction of tobacco consumption in Bangladesh.
Results/Impact: In 2009, BATB’s net-profit was 2,070 million BDT (US$ 1 = 85 BDT at present) and net profit in 2018 was 10,010 million BDT. BATB’s net profit boost-up about 5 times. While BATB’s gross production of cigarettes increased only about 2 times, 24,701 million to 51,000 million sticks during this period. However, from 2017 to 2018, cigarette production reduces 3% whereas profit increased 28%. One packet (10 sticks) premium brand cigarette MRP was 52 BDT (minimum) in 2010 with 58% supplementary duty (SD) and it increases 75 BDT in 2018 with 65% SD. Price is increased more than 44% (23 BDT) while tax increased only 12%. This gap in tax-system and increased prices benefitted BATB and their net-profit increased. These findings shows that how BATB benefitted from the tier-based and complex tax system.
Conclusions: Cigarettes prices should increase with specific duty and single and uniform tax system should introduce in Bangladesh. National Board of Revenue should consult with tobacco
This Abstract was presented at 51st World Conference on Lung Health of the International Union Against Tuberculosis and Lung Disease (The Union), VIRTUAL EVENT, 20 OCTOBER – 24 OCTOBER 2020
EP35 Ongoing battle against the tobacco industry EP35-436-24
for details click here : page S377
