BACKGROUND AND IMPLEMENTATION CHALLENGES: Tobacco companies resort to a wide range of measures to evade taxes, such as successfully lobbying government officers to keep the low tax rate and spreading propaganda about smuggling. Another strategy in Bangladesh is artificially keeping the ‘Maximum Retail Price’ of the cigarette packs lower. Although taxes are levied based on the MRP mentioned on the packs, the same tobacco products are sold for 15-25% more at various outlets. But the government does not get any revenue from that higher amount. In this way, the government is losing about BDT 5000 crore (USD 417 Million) yearly. Also, fractional pricing and selling as single sticks negate the enforcement and proper monitoring of this law, besides encouraging the youth to take up smoking.
INTERVENTION OR RESPONSE: Bangladesh Anti-Tobacco Alliance (BATA) along with other organizations conducted a field-level study to see the printed MRP and the actual selling price. BATA then shared the results of the study with the relevant government department like National Board of Revenue (NBR), Ministry of Commerce, Consumer Rights Protection Authority and other relevant stakeholders. While much remains to be done to prevent this harmful practice, the successful initiative indicates the positive potential for identifying such illegal behavior, punishing it, and ultimately increasing revenue.
RESULTS AND IMPACT: As a result, British American Tobacco Bangladesh along with 2 super shops (Swapno and Mina Bazar) who sold this product violating the MRP law have been fined in Dhaka city. Further, the example was used by BATA members in various parts of the country to activate mobile courts to investigate the practice and provide on-the-spot enforcement.
CONCLUSIONS: While tobacco companies are still manipulating the price to evade taxes in Bangladesh, the efforts of BATA and government enforcement agencies prove such illegal practices can be curbed. More vigilance and firm enforcement will help in compliance issues and saving public health.