Bangladesh Cigarette Manufacturers’ Association (BCMA) repeatedly attempted to influence and interfere in the formulation of National Tobacco Control Policy (NTCP) at least on two occasions[1]. BCMA, the organization that works as a spokesperson for the cigarette manufacturers of Bangladesh, has used the Ministry of Finance (MoF) and National Board of Revenue (NBR) as vehicles for its interference.

What is NTCP?

In 2015, National Tobacco Control Cell (NTCC), a body under the Ministry of Health and Family Welfare (MoHFW) initiated the attempt to formulate the first National Tobacco Control Policy (NTCP) to ‘ensure coordinated efforts between parties on tobacco control.’[2] A committee was formed to draft the Policy.

A draft of NTCP was uploaded on MoHFW website in January 2017 and copies of the draft were sent to relevant ministries, urging the ministries to send their opinions within 15 working days. However, no significant and visible progress regarding this issue took place until the NTCC again sent copies of draft Policy to relevant ministries and National Board of Revenues (NBR) in August 2019. On 15 September 2019, an inter-ministerial meeting on finalization of draft National Tobacco Control Policy was arranged by MoHFW[3]. As of May 2020, the draft is yet to be finalized[4].   

BCMA’s Interference in NTCP Finalization

• Letter to Finance Minister

On 15 September 2019, BCMA sent a letter addressed to the Finance Minister, with copies sent to Finance Secretary, Health Services Secretary and Chairman of National Revenue Board (NBR). In the two-page letter, the association presented its arguments against the tobacco control measures included in the draft NTCP.

The objective of the letter was stated as ‘To inform about the probable impact of National Tobacco Control Policy 2019 on the cigarette industry.’ At the beginning of the letter, BCMA mentioned, ‘...member companies of BCMA have been contributing large sums of revenues to the govt. exchequer throughout the years. In the last FY alone, the govt. earned Taka 28,000 crore from the cigarette industry which stands for almost 12 percent of total internal revenue income of the govt.”

The letter assembled its concerns regarding draft NTCP under 9 points as mentioned below:

1. The increase in cigarette taxes, prices and Health Development Surcharge (HDS): BCMA tried to persuade the govt. against raising taxes and prices, claiming “the recent increase in cigarette prices was not at par with the inflation of the economy which eventually led the consumers to tax-evading low-price cigarette brands. Not only do these cigarette brands harm the govt. revenue earnings but also damages the condition of public health.”   

2. Introduction of specific tax: The Association argued against the proposed specific taxation saying “the introduction of specific taxes will eventually result in the loss of govt. control on cigarette industry and disrupt the revenues stream from this sector to a great extent.”

3. Plain Packaging and 90 percent Graphic Health Warning: BCMA tried to dissuade the govt. from introducing plain packaging as proposed in the draft policy on the ground that it would make it easier to produce counterfeit cigarette and illicit tobacco trade would go up.

4. Standardized Packaging (marketing packets containing same quantity): For BCMA, the introduction of standard packaging and ban on the sale of loose sticks would have an opposite effect. The letter said, “If under the proposed standardized packaging, tobacco products are marketed in same-quantity packets, it may cause a rise in the sale of tobacco products.”

5. Formulating Licensing regulation: BCMA claimed that introducing tobacco sale licensing would cause loss of livelihoods for 7 million people and “It would narrow the scope for selling cigarettes legally and spike illicit cigarette trade, posing a threat to the govt. revenue earnings.”

6. Banning electronic cigarettes: BCMA’s letter claimed that electronic cigarettes could be effective cessation tool, saying, “the benefits of public health, e-cigarettes should not be declared illegal. Rather, it should be brought under specific a policy. Moreover, like other countries of the world, it would open up significant revenue sources for the government.”

7. Banning Foreign Direct Investment (FDI): BCMA emphasized that “tobacco industry can play a positive role in the development of the economy of Bangladesh as long as it keeps attracting FDI. If the govt. shuts down the channels bringing investments in this sector, then the economy will go through its detrimental effect.”

8. The abolishment of govt. partnership/share: For BCMA, govt. partnership with tobacco companies is essential for revenue growth and compliance. The letter said that tobacco industry “should be brought under constant govt. scrutiny in order to safeguard both govt. revenue earnings and public health. Only govt. partnership in this sector can ensure that it is constantly being monitored.”

9. The implementation of Illicit Tobacco Protocol (ITP):  BCMA, in its letter, claimed that trans-border illicit tobacco trade is almost non-existent in Bangladesh, saying “Almost all of the illicit tobacco products of Bangladesh are locally produced and these items evade taxes. So, the implementation of ITP is irrelevant in Bangladesh.”

A scanned copy of BCMA’s letter can be found here.

A translated version of the letter, prepared by Tobacco Industry Watch BD, can be found here.

The validity of BCMA claims

Almost the entirety of BCMA’s reasoning against the tobacco control measures proposed by the draft NTCP in based on the claim that it would cause a revenue loss for the government. The letter reminded the govt. that in 2017-18, the cigarette industry contributed Taka 28,000 crore as revenue. A study published by Bangladesh Cancer Society says that the total economic cost of tobacco use from lost productivity and direct healthcare costs of smoking-related illnesses was estimated at BDT 305.6 billion in 2017-18[5], meanwhile tobacco tax revenues from Supplementary Duty and VAT were only BDT 228.1 billion in 2017-18.

BCMA in its letter mentioned Bangladesh as one of the countries with high tobacco taxes. However, according to a 2016 World Health Organization (WHO) study, with the exception of Myanmar, Nepal, and Indonesia, Bangladesh has the cheapest cigarette prices in the South and South-East Asian region. The average price of the cheapest cigarettes in Bangladesh is less than that of India and other neighboring countries.[6]

BCMA's letter also claimed that an increase in tobacco taxes and prices would result in widespread tax evasion and huge influx of illicit cigarettes, eventually causing the govt. a significant revenue loss. The report ‘Confronting Illicit Tobacco Trade: A Global review of Country Experiences’[7], published in February 2019 by the World Bank, has found out that the percentage of illicit trade of tobacco in Bangladesh stands at merely 1.8 percent, the lowest in 27 countries. BCMA also claimed that the plain packaging strategy of tobacco control is ineffective in curbing the use of tobacco products. But in reality, till today, more than 16 countries in the world, including Australia, Canada, Belgium, Hungary, Turkey, Saudi Arabia, Thailand, Singapore, have introduced plain packaging in their tobacco control mechanism. Bangladesh’s neighboring countries, Sri Lanka and Nepal are also working on implementing plain packaging as of March 2020.

BCMA’s letter also presented electronic cigarettes, vaping, heated (IQOS) tobacco products as ‘safe alternatives’ to traditional cigarettes and advised against banning these products. However, the reality is that the widespread prevalence of emerging tobacco products has already taken a deadly turn in Europe and the U.S. Thailand, Singapore and some 40 countries[8] have already banned e-cig and vaping products.

• NBR’s Pro-Tobacco Interference in NTCP Formulation

National Board of Revenue (NBR) sent a letter signed on 27 October 2019, addressed to Joint Secretary and Coordinator, NTCC regarding the finalization of NTCP.[9] As its opinion on the draft Policy, NBR suggested that the manufacturers and sellers of tobacco and tobacco products should be consulted with on issues including tobacco taxation, prices and increasing the size of graphic health warnings to 90 percent as proposed by the draft. Regarding the introduction of specific taxes, NBR, in the letter, was of the opinion that apart from introducing specific tax, there should be scope to determine the retail prices of products to enable the authority to control the profit of a company. The letter also mentioned that NBR has been considering imposing Value-Added Taxes on unprocessed tobacco.

Aftermath

Following NBR’s letter to NTCC, at least 18 anti-tobacco organizations of the country staged a protest human chain, alleging that NBR had taken a pro-tobacco stance regarding the finalization of NTCP.

Mr. ABM Zubair, Executive Director of PROGGA and one of the organizers of the human chain told BBC Bangla in an interview that

‘Tobacco companies have already met with NBR on 5 November 2019. After the meeting, NBR has directly stated before the press that NTCP issue is related to the business of those companies and it would Ministry of Health to take their opinions regarding the finalization of NTCP.’

Questioning NBR’s stance, he added,

‘The govt. is committed to WHO FCTC according to which tobacco companies cannot be considered as stakeholders when it comes to formulating tobacco control laws and policies. Accordingly, NBR cannot present tobacco companies as stakeholders of NTCP. If tobacco companies were considered as stakeholders in the formulation process, the Health Ministry itself would send them letters regarding the formulation.’

In the same BBC Bangla report, Muhammad Mosharraf Hosen Bhuiyan, Chairman, NBR denied such allegation:

 ‘We [NBR] did not sit with them [BCMA] to discuss NTCP. Why are the anti-tobacco organizations misinterpreting this event in this way?... Tobacco companies give us revenues and it is a legal earning of the country. The percent of revenue is the highest in the country. 81 percent goes to govt. exchequer. Tobacco companies are stakeholders to this process-may be this is why they are saying that we are siding with tobacco companies. We are formulating a tobacco control policy without even consulting with them. Such policy cannot be implemented in our country.’

References

[1] Tobacco Industry Watch BD at PROGGA, BCMA Strong Lobby in Finance Ministry: Finalization of National Tobacco Control Policy Under Threat, 18 September 2019, accessed May 2020

[2] National Tobacco Control Policy Meeting 2018, 19 September 2018, accessed June 2020

[3] National Tobacco Control Policy Inter-ministerial Meeting 2019, 19 March 2019, accessed June 2020

[4] M. Setu, The national tobacco control policy has not seen the light of day in three years, Daily Amader Somoy, 30 December 2019, accessed June 2020

[5] N. Nargis, The cost of tobacco use is enormous in Bangladesh and it is rising, The Tobacco Atlas, 10 March 2010, accessed June 2020

[6] The GATS ATLAS, Expenditure on Cigarettes (page 84, 85), 2015, accessed June 2020

[7] http://pubdocs.worldbank.org/en/455291548434730684/WBG-Tobacco-IllicitTrade-Bangladesh.pdf

[8] Centers for Disease Control and Prevention (CDC), Outbreak of Lung Injury Associated with the Use of E-Cigarette, or Vaping, Products, 25 February 2020, accessed June 2020

[9] S. Parveen, National Board of Revenue is 'taking the side of the tobacco company', BBC Bangla, 11 November 2019, accessed June 2020

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Law & Policy   Interferences