Outside the net, there is a significant portion of smokeless tobacco products in Bangladesh. In 29 districts of 6 divisions, out of 6 smokeless tobacco growers (61 Jordans and 8 Guls) out of the tax net, 33% do not have valid trade licenses. According to a study, 91 percent of manufacturers produce smokeless tobacco products without the help of machinery.
The government recently conducted a research campaign with the help of the Campaign for Tobacco Free Kids (CTFK) to find out the reasons why smokeless tobacco producers are out of the tax net and what to do about it. This information came out in the study. The anti-tobacco organization National Heart Foundation, Dhaka Ahsania Mission, Ubinig, Voice and Pragya jointly held a seminar on Monday in a webinar with the National Board of Revenue (NBR). The head of the research team and the former chairman of the National Board of Revenue. Nasiruddin Ahmed presented the research results. Welcoming remarks at the webinar were Campaign for Tobacco Free Kids (CTFK), Lead Policy Advisor of Bangladesh and former Chairman of Bangladesh Chemical Industries Corporation (BCIC). Mostafizur Rahman.
Maria G., Research Director, Campaign for Tobacco Free Kids (CTFK) took part in the discussion. Bandona Shah, director of Carmona and South Asia Programs, and leaders of anti-tobacco organizations, including various officials from the National Board of Revenue.
According to the study, out of 435 Jorda factories and 46 Gul factories in the country, only 216 Jorda and Gul factories pay taxes. In 29 districts of 6 divisions, out of 6 smokeless tobacco growers (61 Jordans and 8 Guls) out of the tax net, 33% do not have valid trade licenses. Ninety-one percent of manufacturers produce smokeless tobacco products by hand without the help of machinery. These tobacco products are usually produced at home or in small scale factories. The total monthly gross turnover in these factories is Tk. 28 million. The study identified unofficial production of smokeless tobacco products as one of the major barriers to tax compliance.
The study also found that the NBR’s shortage of skilled manpower, field-level infrastructure and traditional equipment and methods are acting as barriers. In the absence of a modern and automated tax return system and a strong tracking and tracing system, producers have the opportunity to evade taxes. The study recommends reforming the tax system on smokeless tobacco products to protect public health and increase revenue. At the same time, it is recommended to reduce the price difference between smokeless tobacco products and reduce the availability.
Other recommendations include introduction of automated tax return system, training of NBR manpower with modern equipment, use of bandroll in these products as tracking and tracing method, empowerment of local government administration to bring unregistered factories under tax net and non-reward of tobacco growers.
NBR member (VAT audit and intelligence) Zakia Sultana said the use of smokeless tobacco products should be controlled not only for revenue but also for public health. Reducing consumption will reduce costs in the health sector.
Of the adult population in Bangladesh, 20.7 per cent (22 million) and 4.5 per cent of school-going children between the ages of 13 and 15 use smokeless tobacco. In the fiscal year 2019-20, the revenue from smokeless tobacco products was Tk 30.7 crore which is only 0.12 percent of the total tobacco revenue. Smokeless tobacco products are harmful to health and are responsible for causing cancer in various parts of the body, including the oral cavity. The production and marketing of smokeless tobacco products in Bangladesh is carried out in an uncontrolled and illegal manner. As a result, it is extremely cheap and readily available. If all smokeless tobacco producers are brought under the net, the revenue will increase significantly.