The government might increase both price slab and tax rates of cheap cigarettes in the budget for fiscal year (FY) 2016-17 with the aim to reduce the consumption of the item.
Price slab for 10-stick packet of cigarettes is likely to be raised to Tk 22 or more from the existing price of Tk 18 and Supplementary Duty (SD) to 50 per cent from the existing 48 per cent.
There may be three-tier price slab for cigarettes instead of existing four tiers.
Cigarettes belonging to lowest slab have 79 per cent share of the market. But, their contribution to the total revenue from the sector has been very low.
The National Board of Revenue (NBR) has moved to revise the tax structure of cheap cigarettes upward following instruction from Finance Minister AMA Muhith.  Â
Currently, consumers of cheap cigarettes under price slab Tk 18 are paying 48 per cent SD. The NBR in a summery to the finance minister proposed to increase it to Tk 27 and above while SD to 54 per cent.
However, the finance minister cut it down to a minimum Tk 22 and fixed SD at 50 per cent for cheap cigarettes.
The finance minister proposed new two slabs one of Tk 45 having 62 per cent SD and another of Tk 70 with 64 per cent SD.
For bidi, the tariff value might be increased by 42 to 45 per cent while for gul and Jarda (non-smoking tobacco) tax is likely to be raised to 100 per cent from existing 60 per cent.
For handmade bidi (without filter), tariff value has been set at Tk 2.25, Tk 3.40 and Tk 7.10 by imposing 30 per cent SD on 8 sticks, 12 sticks, and 25 sticks of bidi respectively.
Tariff value for bidi with filter is likely to be set at Tk 3.85 and Tk 7.75 with 35 per cent SD for 10 sticks and 20 sticks of bidi respectively.
doulot_akter@yahoo.com
Cheap cigarette taxes likely to go up
Doulot Akter Mala | Published: May 25, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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