Smoking to get costlier

Cigarette prices are set to go up as Finance Minister AMA Muhith, while unveiling the budget for 2015-2016 fiscal, yesterday proposed some tax measures considering the health-risk and harmful effects of tobacco products.
“Considering the health-risk and harmful effects of tobacco products, we are committed to reduce the use of tobacco and maximise revenue collection from this sector and thus want to maintain compliance with global anti-smoking policy,” Muhith told the House.  For a long time, it has been a tradition on part of the government to fix the price limit of cigarette for the sake of revenue collection though it does not go with the spirit of the market economy, he said.
“Considering this, I propose to fix a minimum floor level for cigarette price and hence impose specific amount of Supplementary duty and VAT on the fixed price. I also propose to impose fixed amount of supplementary duty and VAT for the additional amount after the floor price of cigarettes,” the finance minister added.
Muhith also proposed imposing 45 per cent tax on all cigarette manufacturing entities, irrespective of publicly listed or non-listed.
“It is well-known and universally acknowledged that cigarette is injurious both to health and environment. In order to avert harmful consequence of cigarette as well as to increase revenue, I propose uniform tax rate of 45% for all cigarette manufacturing entities viz. private limited, public limited or publicly traded company and for taxpayers including individual and partnership firm etc,” he said in his budget speech.
Currently, the publicly traded cigarette manufacturing companies submit 40 per cent corporate tax while the non-listed companies submit 45 per cent tax.
Anti-tobacco organizations Progga, ATMA, and HDRC in their immediate reactions criticised the government for not bringing smoke-less tobaccos under the tax net.
ABM Zubair, Progga Executive Director, said the people’s purchasing power had increased, as the finance minister said, but the supplementary duty of cigarettes had not increased in line with that.
“Ultimately cigarettes will be cheaper for the people,” he said adding that the proposed budget will fail to deter smokers.

Smoking to get costlier

Cigarette prices are set to go up as Finance Minister AMA Muhith, while unveiling the budget for 2015-2016 fiscal, yesterday proposed some tax measures considering the health-risk and harmful effects of tobacco products. Considering the health-risk and harmful effects of tobacco products, we are committed to reduce the use of tobacco and maximise revenue collection from this sector and thus want to maintain compliance with global anti-smoking policy, Muhith told the House. For a long time, it has been a tradition on part of the government to fix the price limit of cigarette for the sake of revenue collection though it does not go with the spirit of the market economy, he said. Considering this, I propose to fix a minimum floor level for cigarette price and hence impose specific amount of Supplementary duty and VAT on the fixed price. I also propose to impose fixed amount of supplementary duty and VAT for the additional amount after the floor price of cigarettes, the finance minister added. Muhith also proposed imposing 45 per cent tax on all cigarette manufacturing entities, irrespective of publicly listed or non-listed. It is well-known and universally acknowledged that cigarette is injurious both to health and environment. In order to avert harmful consequence of cigarette as well as to increase revenue, I propose uniform tax rate of 45% for all cigarette manufacturing entities viz. private limited, public limited or publicly traded company and for taxpayers including individual and partnership firm etc, he said in his budget speech. Currently, the publicly traded cigarette manufacturing companies submit 40 per cent corporate tax while the non-listed companies submit 45 per cent tax. Anti-tobacco organizations Progga, ATMA, and HDRC in their immediate reactions criticised the government for not bringing smoke-less tobaccos under the tax net. ABM Zubair, Progga Executive Director, said the peoples purchasing power had increased, as the finance minister said, but the supplementary duty of cigarettes had not increased in line with that. Ultimately cigarettes will be cheaper for the people, he said adding that the proposed budget will fail to deter smokers.