Lobby backs bidi sector
A section of lawmakers have urged the government not to impose new taxes on bidi on the grounds of saving workers from joblessness, neglecting that nearly 1.2 million people are suffering from tobacco-related diseases.
Anti-tobacco campaigners said taxes should increase on all the tobacco products -- bidi, cigarettes and jarda -- to discourage consumption amid a rise in consumers.
In the last five years to 2009, the number of tobacco users increased by 8.7 million people to total 41.1 million in a population of 150 million, meaning that one in every four consumes tobacco products, according to the International Tobacco Control Policy Project report on Bangladesh.
Of the total number of tobacco users, 20.9 million smoke either cigarettes or bidis (paper-wrapped, hand-made cigarettes), the report added.
Some lawmakers requested the government last month not to impose new taxes on bidis for fiscal 2010-11, on the grounds that a spike in taxes would hurt employment in the sector.
Mujibur Rahman, a lawmaker of Lalmonirhat-2, told The Daily Star that they have requested the authorities not to increase the taxes on bidi.
The lawmaker said: “We don't want the government to raise the taxes on bidi because many workers of the bidi factories will lose job.”
He said a large number of bidi consumers have switched to cigarettes because of the low prices of cigarettes, posing a threat to the bidi producers.
"If the taxes on bidi increase, bidi consumers will smoke cigarettes and many producers as well as workers will be affected. So, we requested the government to keep the tax on bidi as it is," Rahman said.
Golam Mostafa, a lawmaker from Joypurhat-2, said: “I am not in favour of smoking. But I placed the request to the government on human grounds as many people working in the bidi industry will become unemployed for any sharp increase in the taxes."
Their request came at a time when the bidi industry stakeholders -- the owners and workers -- are demanding tax amnesty to save the sector, which employs around 25 lakh.
The sector accounts for around two-thirds of the annual estimated market for sticks at about 155 billion.
A World Health Organisation study, conducted in 2004-05 in Bangladesh, estimated that every year, about 1.2 million people suffer illnesses including lung cancer, stroke and heart disease, because of the tobacco use.
The estimates also show that 57,000 people die every year mainly of tobacco-related diseases.
“The taxes on all tobacco products should increase because the economic loss from tobacco is higher than income,” said Zulfiqar Ali, senior research fellow of Bangladesh Institute of Development Studies.
According to the National Tobacco Control Cell of the health and family welfare ministry, the net loss to the economy due to health care costs for tobacco-related diseases stood more than the revenue earned in 2004.
Hasanul Haq Inu, a lawmaker from tobacco-producing region Kushtia, said he favours a ban on tobacco use.
“But if the government can't impose a ban, it should eliminate the discrimination in taxes between bidis and cigarettes, to protect the bidi industry from ruins,” said Inu.
He said a reduction in taxes on cigarettes by the previous caretaker and the BNP-led alliance governments encouraged a portion of smokers to switch to cigarettes from bidi.
It led to the closure of several bidi factories and many workers lost job, he said.
“Either the government imposes high taxes on bidis and cigarettes to discourage consumption or stop the conspiracy to wipe out the bidi industry,” Inu added.
Unnayan Shamannay, a research organisation, earlier urged the government to impose a 79 percent tax on cigarettes along with 15 percent value added tax, in a bid to cut consumption of tobacco products.
It also suggested imposing an additional 26 percent tax on bidi.
Chinmoy Mutsuddi, project coordinator of Policy Advocacy for Tobacco Taxation of Unnayan Shamannay, said an increase in taxes on cigarettes will cut consumption by between 96 crore and 139 crore sticks.
It may also generate an additional Tk 903 crore in revenues for fiscal 2010-11, he said. Additional revenue worth Tk 68 crore will come from the increase in taxes on bidis, he added.
“If the government spends 16 percent of the revenue, it will be able to generate self employment for 847 workers by giving Tk 50,000 to each of them,” he said, citing a study by Unnayan Shamannay.