The National Board of Revenue (NBR), Government of Bangladesh, has released a report on ‘The Revenue and Employment Outcome of Biri Taxation in Bangladesh’.
Increasing the price of tobacco products through taxation is the single most cost-effective intervention to reduce tobacco consumption and save lives. Until now, however, credible data on the size of employment in the biri sector and estimation of the impact of tax increases on employment in and revenue from the biri sector of Bangladesh has not been available. This recently released report addresses this gap in the evidence base.
With support from the World Health Organization (WHO) and Department of Economics of Dhaka University (DU), NBR conducted the original study in 2012. NBR has since updated the report in 2019 with the most recent data inputs available, with technical assistance from American Cancer Society (ACS), BRAC Institute of Governance and Development (BIGD), DU and WHO.
The findings reveal that an estimated total of nearly 400 000 premature deaths attributable to biri smoking can be averted by increasing tax on this product. Following tax and price increase, annual revenue from biri would more than double, with additional revenue by up to BDT 10,948 million.
The study estimated that the total full-time equivalent employment in the biri industry is 46,916 people with children excluded. Tax and price increase and declining trend of the biri industry together would cause loss of 8,874 full-time equivalent employment. The study found that biri workers can be easily compensated for their income loss if the extra revenue generated from increasing tax on biri is used to train and re-deploy former biri workers. A targeted government intervention is necessary to provide livelihood and income support to unemployed biri workers.
The report makes several recommendations as follows:
- increase excise tax on biri and earmark it for creating a welfare fund for biri workers
- replace current ad valorem excise tax system with a mixed excise tax system
- ensure collaboration and coordination of the National Tobacco Control Cell and NBR with the Ministry of Labour and Employment to explore government and nongovernment initiatives for employment generating opportunities in the districts where the biri factories are locate
- build partnerships among local NGOs, biri worker associations and civil society organizations for making a concerted effort to embed the government initiative to help biri workers transition into alternative livelihoods; and
- create localized and equitable education, training and employment opportunities for biri workers who are primarily women, children, elderly and disabled.
Please click the related Documents link to access the executive summary and the report.