Tk 9.0b health surcharge from tobacco cos remains utilised

Dhaka,  Mon,  25 September 2017
Published : 26 Aug 2017, 00:38:14

Tk 9.0b health surcharge from tobacco cos remains utilised

No guidelines so far
Doulot Akter Mala

Health development surcharge worth Tk 9.0 billion remained unutilised during the last three fiscal years due to lack of a specific guideline to spend the amount.

The Value Added Tax (VAT) wing under the National Board of Revenue (NBR) collected the revenue during the last three financial years, 2014-15, 2015-16 and 2016-17 as 1.0 per cent 'health development surcharge' from tobacco companies.

The amount remained unutilised in the public exchequer as the government did not use it for checking tobacco consumption and campaigning against the health hazardous item.

Slow pace of implementation and approval of the 'Health Development Surcharge Management Policy' of the Ministry of Health is responsible for the unutilised fund, sources said.

The draft of the policy got approval in an inter-ministerial meeting on February 15, 2017.

The policy is scheduled to be placed before the cabinet in this month (August), said a senior health ministry official.

He said the National Tobacco Control Cell (NTCC) under the ministry of heath can execute a national tobacco control programme with the surcharge amount conducting research and campaign, rehabilitating tobacco-users, creating alternative jobs for tobacco farmers and ensuring overall health development.

On January 30-31, 2016 in the South Asian Speakers' conference, Prime Minister Sheikh Hasina instructed the authorities to adopt a national tobacco control programme with the amount of health development surcharge.

Following the instruction, the ministry of health framed the draft surcharge policy and sought opinion of nine relevant ministries including finance, agriculture and industries.

With the recommendations, the health ministry published the draft in its website on December 2016 for public opinion.

The government imposed the surcharge in the budget for FY 2014-15 and the NBR issued rules for collecting the amount.

As per the rules, the VAT authority collects the surcharge on the basis of value on which they claim VAT. The surcharge is levied for supply of locally produced tobacco products at production stage.

Some 11 countries across the world collect this type of surcharge widely known as 'sin-tax'.

India, Thailand, Nepal, Qatar, Mongolia, Vietnam, Laos, Iceland and Estonia collect this type of surcharge on tobacco products.

In 1976, India introduced Rs 5.0 surcharge on 1,000 sticks of cigarette. It has formed a 'Bidi workers welfare fund' with the surcharge amount to provide free health service, maternity service and scholarships for children.

Nepal imposed Rs 0.1 in 1993 and increased it to Rs 0.2 in 2003-04.

Thailand, Qatar and Mongolia imposed 2.0 per cent health surcharge each in 2001, 2002 and 2005 respectively.

Thailand is running 'Thai health foundation' and Nepal formed 'health tax fund' with the surcharge.

In 2013, Vietnam and Laos introduced the surcharge at 1.0 to 2.0 per cent and US$ 0.03.

Roksana Kader, additional secretary (public health and world health) of the Ministry of Health said the draft policy has gone through several reviews and revisions following directives of the ministry of finance and stakeholders.

"We hope to place the draft policy for approval of the cabinet by this month," she said.

After approval of the policy, it will be sent to the finance division to finalise the process of spending the fund of health surcharge, she said.

Md Ruhul Quddus, joint secretary and coordinator of National Tobacco Control Cell (NTCC) said the cell is now running its activities with the fund support of Bloomberg Philanthropy.

"There is no government fund yet for the NTCC. We hope, the surcharge policy would be approved soon so that we can launch national tobacco control programme," he added.
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