Death Marketing-1

Tobacco Companies Pay the Most Tax: A Myth

It is the users of tobacco who bear the lion's share of taxes, not the tobacco companies. An analysis of BATB's 2018 Annual report reveals that the company deposited a total of Taka 19,133 crore to the government exchequer among which the company deposited Taka 359 crore as direct tax (which is only 1.88 percent of revenues generated from tobacco) from its income. The rest of the money that they deposited, amounting to Taka 18,774 crore (98.12 percent of tobacco revenues) came from the consumers as indirect taxes. It should be noted that companies pay the government two types of taxes (direct and indirect) but in three ways: A) from their income (direct tax), B) as custom duty at the import and export stages (indirect), and C) taxes collected from the consumers of tobacco products (indirect). VAT and Supplementary Duty are borne by the consumers; the companies are mere collectors of these taxes. Since custom duty is also a kind of indirect tax, tobacco company shifts the burden of this tax to the consumers as well. Finally, it is the consumers who bear the lion’s share of tobacco taxes. And so, any claim that tobacco companies pay the govt. with large sum of revenues is a wrong one. We strongly demand that the prices and taxes of all tobacco products should be raised in the upcoming budget in such a way so that the people, particularly the youth and the poor, are discouraged from using tobacco.