Bidi, cigarette makers to count high tax bill

Smoking is going to be costlier in the new financial year after Finance Minister AMA Muhith proposed imposing taxes on all kinds of bidi and cigarettes including local cigarette paper and artificial filament tow.
While placing the budget for fiscal 2015-16, he proposed 2.0 per cent hike in taxes from 61 per cent to 63 per cent for high value cigarette for each 10 sticks worth Tk 70 and above instead of the existing Tk 90 and above slab.
The proposed taxes for three other slabs of Tk 40-Tk 69, Tk 20-Tk 39 and up to Tk 19 for each 10 sticks cigarettes are respectively 61 per cent, 60 per cent and 48 per cent.
The slowest price slab of cigarette up to Tk 19 got the highest tax increase proposal of 5.0 per cent. Existing tax for lowest slab price of Tk 15-Tk 16.50 of 10 sticks cigarettes is 43 per cent.
However, the tax rates for two middle slabs have been proposed to be rearranged. Existing slab of Tk 32.50- Tk 35 was proposed to rearrange at Tk 20-Tk 39 and Tk 50- Tk 54 at Tk 40-Tk 69.
Local bidi price also has been proposed for tax increase.  
Mr Muhit said: "Considering the interest of the local bidi industry workers, no notable reform or changes in tax structures of bidi sector has been brought about for the last couple of years."
He said currently, the price of 25 sticks of non-filter and 20 sticks of filter bidi stands at Tk. 6.14 and Tk. 6.92 respectively. Due to its easy availability, the bulk of people smokes this product and becomes vulnerable to health risk.
"Taking all these factors into consideration, I propose to rationalise the existing tariff value of bidi by raising the price of 25 sticks of non-filter and 20 sticks of filter bidi to Tk. 7.06 and Tk. 7.98 respectively," he said in his speech.
The Finance minister also proposed imposing 20 per cent supplementary duty on domestic production of cigarette paper.
He said: "Although supplementary duty at the rate of 20 per cent is currently levied on the domestic production of the cigarette paper, tendency of tax evasion is heard in this regard as nothing is mentioned in the tariff description of HS Code of the cigarette paper."
"To get rid of this unfairness, I propose to include specific description of the bidi paper and hence impose supplementary duty at the rate of 20 percent on the domestic production of this item as well."
Besides, the finance minister AMA Muhith also proposed to increase the customs duty on Artificial Filament Tow, used to produce filter tips for cigarettes, from 5.0 per cent to 25 per cent.  
The budget also made a proposal of 5.0 per cent corporate tax increase for publicly-traded tobacco companies from 40 per cent to 45 per cent.
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