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Fewer than half of smokeless tobacco makers pay taxes

by Istiak Ahmed Shimul

A significant number of smokeless tobacco (SLT) manufacturers in Bangladesh have managed to slip away from the government’s tax net, anti-tobacco platform Knowledge for Progress said yesterday, referring to a recent study. 

The platform said informal nature of SLT production was the main impediment in ensuring tax compliance in the sector, according to a press release.

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Findings of the study “Factors Inhibiting Smokeless Tobacco Tax Payments by Smokeless Tobacco Manufacturers Operating Outside the Tax Net in Bangladesh” was disclosed during a webinar jointly organised by National Heart Foundation, Dhaka Ahsania Mission, Ubinig, and Voice and Knowledge for Progress — also known as Progga.

Conducted with assistance from Campaign for Tobacco Free Kids, the study revealed that of 483 SLT manufacturers, 435 zarda and 48 gul producers, only 218 pay taxes.

Also, 33 percent of 88 SLT manufacturers in 29 districts do not have valid trade licence.

It said 91 percent manufacturers produce SLT products manually, with an estimated monthly gross turnover of Tk 2.7 crore.

The study recommends a reform of the SLT tax structure, with a view to safeguard public health and increase revenue collection.

National Board of Revenue Member Zakia Sultana said SLT use should be reined, not only for the sake of revenue but also for public health.

In the 2019-20 fiscal, SLT sector contributed Tk 30.6 crore as revenue, Progga said.

SLTs are severely detrimental to health and responsible for causing oral, oropharyngeal and other types of cancers, it said.

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