Perspectives on reforming the tobacco tax administration system in Bangladesh to enhance public health.

Abstract

Background: Taxation is the most cost-effective instrument to regulate the consumption of tobacco products. However, weak tax administration can compromise the effectiveness of taxation. This paper aimed to understand the process of the current tobacco tax administration system in Bangladesh, identify gaps and outline the policy priorities to strengthen the tobacco tax administration process in Bangladesh.

Methods: A sequential qualitative study was conducted in two linked phases: (a) document review and evidence synthesis; and (b) 20 key informant interviews and one workshop with relevant stakeholders to validate the findings generated from both phases.

Results: The complex tax system combined with weak tax administration leads to tax evasion in Bangladesh. The processes of procuring and collecting banderoles and tax stamps vary between cigarette and biri companies, and across large and small tax-paying companies. The use of banderoles at the factory level is maintained manually, and there is no system to routinely verify the authenticity of banderoles. Many unregistered small-scale tobacco manufacturing units often reuse the banderoles on new packs. Shortage of staff with inadequate training at the National Board of Revenue restricts adequate tobacco market monitoring. Electronic tax stamps and banderoles combined with a secure digital tracking and tracing system should be introduced to better monitor the supply, distribution and sale of tobacco products. Training needs to be provided to develop capacity of relevant officials.

Conclusion: The tobacco tax administration needs to be strengthened to increase the government's tobacco tax revenue and protect public health.