Health Development Surcharge in Bangladesh
Bangladesh government has imposed a one per cent HDS on tobacco products on the national budget considering the stringent demands of the anti-tobacco activists
Meer Nabeen Ekram
The Health Development Surcharge (HDS) is a type of tax which is used on the import and production level of products like tobacco, alcohol which are considered harmful for public health. Such taxes are also known as Sin Tax as well and mostly imposed on reducing the usage of harmful products and collect revenue to meet the treatment costs of diseases caused for the products. Almost all the countries use the HDS fund for treatment of diseases caused by such products, research, awareness campaign and alternative employment creation, etc.
The HDS is getting popularity in line with the regular tax imposition across the world. The HDS is collected in around 11 countries including Bangladesh from tobacco products and among the countries, India, Thailand, Nepal, Qatar, Mongolia, Vietnam, Laos, Iceland and Estonia is notable. Investigations have found that neighboring country India has imposed Rupees 5 on per 1000 pieces of bidi sticks in 1976, while Nepal imposed 1 Paisa for per cigarette stick in 1993 and the rate has been increased to 2 Paisa in 2003 -04 fiscal years. Besides, the rate of HDS in Thailand it is 2 percent from 2001, in Qatar 2 percent from 2002, 2 percent in Mongolia from 2005, 0.9 percent in Iceland from 19969, 3.5 percent in Estonia from 1994, 1-2 percent in Vietnam from 2013 and USD 0.003 in Laos from 2013.
The governments of different countries have been using the fund for different purposes including tobacco control. India has formed a Bidi Workers Welfare Fund with the HDS funds and it provides services like free health care, maternity facilities, school uniforms for kids, stipend, etc. to the registered members. Thailand has formed Thai Health Care with the fund which acts to perform activities to reduce tobacco use like research, media campaign, etc. The Health Tax Fund of Nepal helps in B.P. Koirala Memorial Cancer Hospital, Nepal Cancer Relief Society and other community hospitals. But the HDS may not be applicable to the developed and developing countries where the health care system is developed. Countries like Austria, Korea, Brunei, Canada, Singapore and some other countries provide different health care facilities including tobacco control from the revenue of their national budget. But the countries like Bangladesh where the health facilities are delicate, the HDS is an effective way to control tobacco use in the country. To prevent tobacco use, formulation of an effective law and raising public awareness for its implementation, research, treatment of the victims, etc. are important and they need a specific planning and funds and in that case the HDS on tobacco is a timely measure.
Bangladesh government has imposed a 1% HDS on tobacco products on the national budget of 2014 -15 fiscal years considering the stringent demands of the anti-tobacco activists and the National Board of Revenue (NBR) has formulated Health Development Surcharge Realisation Rules 2014. The rules say that the price-based surcharge would be applicable on the imported and locally produced tobacco products. The rules also indicated that the surcharge would be implied on the imported tobacco products based on the prices on which the VAT has been fixed. In the case of the locally produced products, the surcharge would be fixed on the production level based on the imposing price of Section 5, Sub section 2 of the VAT Law. If someone violates the law, according to the Rules, it would be considered as an offence for the individual or the organization and the punishments would be done according to the VAT law and the Rules formulated on the issues and if necessary, steps could be taken based on the Section 56 of the VAT law 1991.
Following the surcharge realisation rate of the government, it is estimated that the treasury is supposed to receive around TK 250 crores as 1% surcharge in 2014-15 fiscal years. However, following the HDS financial code, 2212, set by the Finance Ministry has received only TK 2 crores as the HDS and the remaining fund has been submitted on miscellaneous codes. Till March of 2015 16 fiscal years, TK 171 crores has been realised and based on the NBR estimation, around 229 crores would be added in the entire 2015-16 fiscal years.
Though the minister for finance on his budget speech had said to use the funds from HDS for curing the tobacco related disease and rehabilitation, the realised fund could not be used as there are no policies to use the HDS fund. Consequently, the people are being deprived of the initiative adopted by the government. However, hopefully the Health Ministry has formed a committee to set things to be done with the HDS fund and already the Draft of the Health Development Surcharge Policy 2016 has been formulated. The anti-tobacco activists are on the view that the HDS fund could be used for running a National Tobacco Control Programme under the National Tobacco Control Cell (NTCC under the Health Ministry) which could implement tobacco control activities like research and campaign, implementation of the nicotine addiction removal, alternative employment for the farmers and production workers engaged into tobacco farming and others.
Tobacco companies are claiming thousands of lives and making 0.4 million people crippled every year. They are obstructing everywhere the environment-ecology, food security, child labor reduction and education. The nation could not be saved from the tobacco epidemic unless an effective tobacco taxation like the HDS is realised.
The writer is Programme Officer, National Tobacco Control Cell (NTCC), Ministry of Health and Family Welfare
