Representatives from bidi manufacturers yesterday termed the tobacco taxation policy “discriminatory” as the taxes imposed on bidi is much higher than cigarettes and urged the National Board of Revenue to remove the discrimination.
Bidi and cigarette both are tobacco products, but the government has imposed higher taxes on bidi that has led to a situation where many factories were closed down already and many others dismissed employees in a large number, said leaders of Bangladesh Bidi Shilpa Malik Samity.
They proposed the NBR not to impose more taxes on bidi, rather adjust the disparity by imposing more taxes on cigarette.
The association president Bijoy Krishna Dey placed the demand at a pre-budget meeting with the revenue body at its headquarters at Segunbagicha in Dhaka. The NBR also held a meeting with representatives of small, medium, and large industries with NBR member Farid Uddin in the chair.
Bijoy Krishna Dey said discrimination against bidi industry is nothing new, rather it has been continued for years. “Tax on bidi was only 10% in 2003, which has now been raised to 20% whereas the tax on cigarette has been raised by only 4%.”
He said the discrimination was mostly reflected in the last 2013-14 budget, when the government increased slabs in bidi with 23% tax hike as compared to 7.9% on cigarettes.
“In the last budget, the government has introduced 10% Advance Income Tax on the sector and, therefore, we are now paying 61% AIT whereas the cigarette businesses do not want to pay any AIT though it is a tobacco product,” he added.
The association leader said the discriminated policy has resulted in dismissal of around 25 lakh employees and closing down of 100 factories in the last 10 years.
The other demands from the association includes withdrawal of supplementary duty from bidi, cancellation of AIT, cancellation of Value Added Tax at source and cancellation of fourth slab of cigarette.
According to statistics compiled by NBR, the government has collected Tk5,123 crore of revenue from the tobacco sector in FY 2008-09, Tk6,368 crore in 2009-10, Tk7,448 crore in 2010-11, Tk10,176 crore in 2011-12, and Tk9,928 crore in 2012-13.
NBR Chairman Md. Ghulam Hussain earlier told media that the tax on health hazardous products will see a rise in the coming budget.
“The government is planning to increase tax rates on cigarette, bidi, jarda and other health hazardous products,” he added.
Sectors demand duty cut
Bangladesh Furniture Owners’ Association has proposed the NBR to withdraw 10% duty on import of wood to promote furniture business. They also demanded reducing the tax on particle board from 54% to 12%, and sand papers from 74% to 5%.
At the same meeting, Bangladesh Resham (Silk) Shilpa Malik Samity demanded withdrawal of 35% duty on import of silk while Bangladesh Paduka Prostutkarok Samity demanded withdrawal of VAT from the sector.