Al Amin :
The National Board of Revenue (NBR) is likely to increase the prices of the low segments of cigarettes as it failed to collect expected revenue from the sector, which accounts more than 10 per cent of the total revenue.
Cigarette is the only product that price is fixed by the NBR for taxes and other complexities.
But, the board is unable to collect estimated revenue from the sector and it is going to miss the target this fiscal year by a big margin. If the projected revenue does not come from the sector, it may affect the overall revenue earnings, the NBR officials said.
The reason behind the lower revenue collection from the sector is that the revenue board has not increased the prices of the low segment in the current fiscal year, they said.
The cigarette industry also accounts for more than half of the total revenue of the Largest Taxpayer Unit (VAT) wing of the NBR collects.
But the LTU wing received Tk 400 crore less revenue from a largest cigarette company
in the last month (February) compared with the same month of the last year.
Analyzing the collection ratio of the eight months of the current fiscal year, it is noticed that the revenue is not being collected from this sector as per the target.
The NBR received Tk 28,500 crore from the cigarette sector in the last fiscal year (2020-21), which is 13 per cent higher than the previous year (2019-20).
It is expected that maximum revenue worth Tk 30,000 crore is likely to come from this sector in the current fiscal year, if the present collection trends continue the growth will be only four per cent compared to the last fiscal year.
But, the growth from the cigarette sector usually remained in between 10 to 15 per cent in the recent years, as the market share of the low segments is around 75 per cent.
NBR officials said the prices of the low segment cigarettes has not been increased this year, although it has done every year to protect public health and increase revenue collection, resulting it will impact on revenue collection this year.
The price of a pack of 10 sticks of the low segment cigarettes has been fixed at Tk 39 in the current fiscal year, which was same in the previous year.
If the prices of low segment are not increased, the revenue collection from this sector will not be increased and smoking will not be discouraged, they said.
Under this circumstance, many stakeholders, including manufacturers, have already proposed in the ongoing pre-budget discussion for increasing the prices of the low segments in the upcoming national budget.
