Higher Cigarette Taxes in Bangladesh

Cigarette manufacturers in Bangladesh will likely pay higher taxes on gross receipts from the next fiscal year as the National Board of Revenue (NBR) collects more taxes to discourage the “health hazardous” business, reports The Daily Star.

The proposed tax increase is part of the Income Tax Bill 2023 introduced to Parliament by Finance Minister A.H.M. Mustafa Kamal earlier this month. The proposed bill will replace the current Income Tax Ordinance 1984.

The new bill would have manufacturers of cigarettes, bidis or handmade cigarettes, chewing tobacco and smokeless tobacco paying a 3 percent tax on turnover at minimum, up from the current 1 percent. It would also place a flat 10 percent tax deducted at source (TDS) traders supplying tobacco leaf to tobacco companies, replacing the multiple rates of TDS.

“We have proposed a hike in tax rates to discourage tobacco use,” said a senior official of the NBR.

“We appreciate the NBR for responding positively to the call of raising tobacco taxes by the social activists,” said Atiur Rahman, chairperson of the think tank Unnayan Shamannay.