Smoking looked set to become costlier in Bangladesh during the new financial year after Finance Minister A.M.A. Muhith last week proposed imposing tax increases on tobacco products, acetate tow and tobacco-product paper, according to a story in The Financial Express.
The budget proposals include too plans to increase the corporation tax levied on publicly-traded tobacco companies.
While announcing his budget plans for the fiscal year 2015-16, which begins on July 1, he proposed increasing the excise levied on high-priced cigarettes from 61 percent to 63 percent. The excise on the lowest-priced cigarettes is 43 percent.
“Considering the interest of the local bidi industry workers, no notable reform or changes in tax structures of bidi sector has been brought about for the last couple of years,” said Muhith.
He said currently the prices of 25 non-filter and 20 filter bidis were Tk6.14 and Tk6.92 respectively, and, because of their low prices, most tobacco users smoked this product and became vulnerable to health risks.
“Taking all these factors into consideration, I propose to rationalise the existing tariff value of bidi by raising the price of 25 sticks of non-filter and 20 sticks of filter bidi to Tk7.06 and Tk7.98 respectively,” he said in his budget speech.
The minister proposed cracking down on the collection of an existing 20 percent supplementary duty on the domestic production of cigarette paper, while imposing a 20 percent supplementary duty on bidi paper and increasing the customs duty on acetate tow from 5.0 percent to 25 percent.
He proposed too increasing the corporation tax on publicly-traded tobacco companies from 40 percent to 45 percent.