Local cos term tax proposal on cigarettes unfair
Sunday, 22 May 2011
Our Correspondent
CHITTAGONG, May 21: The tax proposals by the NBR (National Board of Revenue) with 32 per cent increase of tax on the low-priced cigarette brands is discriminatory, alleged local producers and consumers. Terming the price proposal as 'record high' they said it would seriously affect the country's low income group people. They also urged the government to reduce tax on low-priced cigarettes. The NBR imposes taxes on cigarettes after classifying those under any of four slabs - very high quality, high quality, medium quality and low quality - according to affordability of the common consumers. Producers of the low-priced cigarettes are local companies, while producers of medium, high and deluxe brand cigarettes are two multinational companies. Each 10-stick packet of locally-produced and low-priced cigarettes now sells at Tk 8.40. But the NBR has proposed the government to increase tax on those by 32 per cent from the existing level. If implemented, the price of the same would be Tk 11.00, said the producers. On the other hand, the taxes on medium, high and very high quality brands of cigarettes have been proposed to increase by 1.9 per cent, 3.23 per cent and 5.70 per cent respectively. This is very discriminatory, industry insiders said. The negative impact is severely felt in the local market, said retail shoppers in the port-city. They said per packet price of 20-stick Navy-branded filter cigarette was Tk 17 until last week. But, the same was selling at Tk 21 today. The industry insiders said even last year the NBR fixed duty-slabs of cigarettes after consultation with the manufacturers. So, there was a logical sequence in enhancement of cigarette prices, and the poor consumers were not affected. "This year the NBR arbitrarily proposed to impose unusual tax on the low-priced cigarette brands of local manufacturers, such as Dhaka Tobacco Company, Abul Khair Tobacco Co Ltd and Nasir Group," said marketing manager of a local tobacco company. "The companies are paying a substantial amount of money to the public exchequer every year in the forms of tax and VAT," he also said. He said while proposing new taxes the NBR kept in mind the impact of price hike on the smokers of medium, high and very high quality cigarettes. However, the impact on poor people, who prefer low-priced brands, was not considered at all. The government increased the price of low quality cigarettes by 8.33 per cent in 2008, 12.31 per cent in 2009, and 15.7 per cent in 2010.
CHITTAGONG, May 21: The tax proposals by the NBR (National Board of Revenue) with 32 per cent increase of tax on the low-priced cigarette brands is discriminatory, alleged local producers and consumers. Terming the price proposal as 'record high' they said it would seriously affect the country's low income group people. They also urged the government to reduce tax on low-priced cigarettes. The NBR imposes taxes on cigarettes after classifying those under any of four slabs - very high quality, high quality, medium quality and low quality - according to affordability of the common consumers. Producers of the low-priced cigarettes are local companies, while producers of medium, high and deluxe brand cigarettes are two multinational companies. Each 10-stick packet of locally-produced and low-priced cigarettes now sells at Tk 8.40. But the NBR has proposed the government to increase tax on those by 32 per cent from the existing level. If implemented, the price of the same would be Tk 11.00, said the producers. On the other hand, the taxes on medium, high and very high quality brands of cigarettes have been proposed to increase by 1.9 per cent, 3.23 per cent and 5.70 per cent respectively. This is very discriminatory, industry insiders said. The negative impact is severely felt in the local market, said retail shoppers in the port-city. They said per packet price of 20-stick Navy-branded filter cigarette was Tk 17 until last week. But, the same was selling at Tk 21 today. The industry insiders said even last year the NBR fixed duty-slabs of cigarettes after consultation with the manufacturers. So, there was a logical sequence in enhancement of cigarette prices, and the poor consumers were not affected. "This year the NBR arbitrarily proposed to impose unusual tax on the low-priced cigarette brands of local manufacturers, such as Dhaka Tobacco Company, Abul Khair Tobacco Co Ltd and Nasir Group," said marketing manager of a local tobacco company. "The companies are paying a substantial amount of money to the public exchequer every year in the forms of tax and VAT," he also said. He said while proposing new taxes the NBR kept in mind the impact of price hike on the smokers of medium, high and very high quality cigarettes. However, the impact on poor people, who prefer low-priced brands, was not considered at all. The government increased the price of low quality cigarettes by 8.33 per cent in 2008, 12.31 per cent in 2009, and 15.7 per cent in 2010.