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2.5% surcharge on tobacco products

  • Published at 05:05 pm June 1st, 2017
  • Last updated at 06:38 pm June 1st, 2017
2.5% surcharge on tobacco products
The government has proposed to impose a surcharge of 2.5% on incomes from tobacco products including cigarettes, bidi, zarda and gul. Finance Minister AMA Muhith said this on Thursday, when delivering his budget speech for the fiscal year 2017-18. Cigarettes, bidi and other tobacco products are injurious to health, and the government and society incur additional medicare costs due to the consumption of these tobacco items, he said. Therefore, high rates of duties are imposed on tobacco and tobacco production, and this year the government will impose 25% export duty on these items with a view to discouraging their production and consumption. However,  manufacturers will fix the products' prices. Given the market competition, Muhith proposed to increase the price for every 10 sticks of low-segment cigarettes to Tk27 from Tk23 and the supplementary duty rate to 52% from 50%. He also proposed to set the price for every 10 sticks of foreign branded cigarettes at Tk35 and the supplementary duty rate at 55%. However, the government is not increasing prices or supplementary duties for medium and high segments of cigarettes that are currently sold at Tk45 and above. The existing supplementary duty rates for non-filter bidi and filter bidi will remain unchanged at 30% and 35% respectively. He proposed to fix the tax inclusive price of 25 sticks of non-filter bidi at Tk15 and 20 sticks of filter bidi at Tk15. The minister said the existing tariff value of bidi should be abolished, adding that the proposed rates of bidi would be effective from June 1, 2017.