Wednesday, June 13, 2012

Bangladesh Has the Cheapest Prices for Cigarettes In the World

In a striking discovery, a report states cigarette prices have been decreasing steadily since 2003 in Bangladesh due to “incorrect” taxation, encouraging new users. It states the real prices have, indeed, dropped as the different taxes were charged on various price slabs and were never grounded on inflation.

Raising real incomes have made the smoking products affordable, the report states and advices special cigarette tax of Tk 34 for 10 cigarettes, Tk 4.95 for 25 bidis and concluding the present price slabs. “It would support about 7 million cigarette and 3.5 million bidi smokers to stop smoking and keep 10 million teenagers away from starting lighting up,” stated Professor Abul Barkat, at the press conference.

Professor Barkat added, “If the government passes the policy, it will generate Tk 15 billion more in tax profit from cigarettes and Tk 7.2 billion from bidis.” He also said that the most effective method to decrease smoking is to boost the price of smoking products through tax increases and guaranteeing that the tax boost are reflected in prices. Decreasing cigarette and bidi prices lead to rise in smoking while lifting prices will drop tobacco consumption. For instance a 10% growth in mean cigarette prices in Bangladesh will reduce about 5% of smokers, while a 10% in bidi prices will decrease their use by approximately 7%.

As cigarette manufacturers fight each year to stop tobacco tax increase in order to keep their sales unchanged, anti-smoking activists stood against the move this year. The government increased cigarette prices in various slabs and additional taxes imposed on cigarettes vary from 33% to 55% in four tiers. Such a difference in price tiers, anti-smoking activist’s state, rather helped people to switch from expensive to lower cost smokes.

Cigarette consumption has increased by 40% between 1997 and 2010 from about 48.8 billion to approximately 69.6 billion cigarettes in Bangladesh. As cigarette manufacturers state that they pay Tk 73 billion for healthcare and lost productivity costs. Employment in tobacco growing sector and manufacturing comprises only 0.5% of the whole labor force. Concerning about the loss of profit, the Ministry of Finance currently postponed its plans for a more sever tobacco control law.

Bangladesh occupies the 20th place in the tobacco-manufacturing countries rating and also has the cheapest cigarettes in the world.