Smokers might not be popular but their taxes are

The government of Bangladesh has been told that it should increase tobacco taxes in order to achieve its revenue target for the next financial year, according to a story in The Daily Star.

“We have to put more emphasis on taxation of tobacco products..,” said Ahsan H. Mansur, executive director of the Policy Research Institute, which describes itself as a private, non-profit, non-partisan research organization dedicated to promoting a greater understanding of the Bangladesh economy.

Mansur was speaking at a seminar on ‘Fiscal policy for 2015-16 budget in the context of the Seventh Plan’ co-organised by PRI and UKaid at the PRI office in Dhaka.

Focusing on the tobacco sector was said to be needed to achieve the revenue target since the implementation of structural reforms in VAT and other areas of taxation had not yet gained momentum, Mansur said.

The weighted average prices of bidis and cigarettes were quite low in Bangladesh and increasing the rate of taxation on them was the only way to reduce smoking and generate 20 percent year-on-year growth in revenue from tobacco products.

Mansur said that, in line with global best practices, Bangladesh should move to a uniform tax structure for all smoked tobacco products.

The Finance Minister, A.M.A. Muhith, said the government would consider during upcoming budget discussions the proposals made by the PRI.