Government should divest from tobacco companies

Opine civil society and anti-tobacco organizations

Civil society and tobacco control bodies said on Saturday that the government should divest itself of investments in tobacco companies to show its commitment to a tobacco-free Bangladesh by 2040.

They stressed the need for a comprehensive tobacco tax policy, including an end to preferential tax treatments for tobacco companies. Speakers also said that political parties and government need political commitment to achieve the goal of becoming a tobacco-free country.

Speakers made the observation on Saturday while revealing the results of a study on “Tobacco Company Interference in the Tobacco Taxation Process in Bangladesh” held at CIRDAP auditorium in the city. VOICE, a rights-based research and advocacy organization, organized the event to share the findings of the study. The event was chaired by the eminent economist and also Chairman of PKSF, Dr. Qazi Kholiquzzaman Ahmad, while former Secretary and Chairman of NBR, Dr. Muhammad Abdul Mazid and Dr. Nasiruddin Ahmed spoke in as experts. Ataur Rahman Masud, Senior Policy Advisor, Campaign for Tobacco Free Kids, moderated the event.

Speaking during the discussion, the speakers further stated that the National Board of Revenue (NBR) should prioritize public health over the profitability of tobacco companies, as tobacco tax revenue does not represent only a fraction of the burden of public and private health costs resulting from tobacco use.

They urged the government to prohibit representatives of tobacco companies and their affiliates from participating directly or indirectly in tobacco control program development, policy development and other government positions and processes that pose inherent conflicts of interest.

Ahmed Swapan Mahmud, Executive Director of VOICE, delivered the keynote while referencing the study. He said a lot of strong evidence of illegal interference by the tobacco industries has come to light.

To understand the types and extent of tobacco company influence on tax policymaking in Bangladesh, researchers conducted 23 key informant interviews with 4 types of tobacco control policy actors: policy makers, journalists, tobacco control practitioners and researchers from March to May 2021.

Responses from key tobacco tax policy stakeholders indicate that the tobacco industry is heavily involved in the tobacco tax policy development process. The study revealed that tobacco companies have close ties and mutually beneficial relationships with various government offices and high-ranking figures.

The findings indicate that Tobacco Company receives preferential treatment during key phases of the tax policy reform process. Study participants indicated that the National Board of Revenue (NBR) will not impose new tobacco tax provisions until they reach an agreement with the tobacco company on the misrepresentation of company on their economic contributions.

They said tobacco companies offer cash and in-kind gifts as well as overseas trips to NRB and other relevant government officials in exchange for greater contribution and favorable consideration in the tax reform process.

The Government of Bangladesh approves tobacco company donations and other corporate social responsibility (CSR) activities,” the study concludes.

They said elected officials use BAT’s well-established afforestation (Bonayan), clean water (Probaho) and solar energy (Deepto) programs to show development progress and win favor with voters. They (the elected) also join the CSR activities of BAT and small tobacco companies to improve their public image.

The findings of the study identified several conflicts of interest between tobacco companies and the government, including the ownership of shares in British American Tobacco Bangladesh (BATB) and the ownership of 6 of the 10 board members of BAT Bangladesh by current or former government officials.

Participants reported several ways tobacco companies evade taxes, likely with knowledge of NBR.

In his speech, Dr. Qazi Kholiquzzaman Ahmad, Chairman of PKSF, said the government should divest from British American Tobacco Company and sell all shares to show its commitment to making the country tobacco-free.

He said a specific flat tax rate on tobacco would be much more effective in reducing tobacco consumption and accessibility in Bangladesh. “This system tends to lead to higher prices for all brand levels, reduces the incentive to switch to cheaper brands, and is easier to administer compared to the ad valorem one,” he said.

Dr. Nasiruddin Ahmed, former chairman of the National Board of Revenue, said strong political commitment is the prerequisite for a tobacco-free Bangladesh. He said the tobacco industry’s interference in national policy-making has been going on for many years in a very strategic way.

They lobbied relevant ministries and got permission to continue production, marketing and distribution of tobacco even during the Covid lockdown with the help of an outdated law named “Essential Commodities Act 1956”, which classifies cigarettes as an essential commodity in Bangladesh.

Former chairman of the National Revenue Council, Muhammad Abdul Mazid, said no political party has maintained “tobacco-free Bangladesh” as a program in its official manifesto. He said the involvement of the tobacco industry in any youth, public education or other tobacco control initiatives should be prohibited. “CSR activities carried out by the tobacco industry should also be banned,” he added.

Among others, Abdus Salam Mia, director of grants, CTFK, development researcher Fazlul Haq Mazumder and activist Sharmin Rini spoke on this occasion.

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