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Steps needed to check smuggling

Revenue from cigarette sector rises sharply

Star Economic Report
The price differential between smuggled and local cigarettes will need to be increased to check smuggling of the item, according to the country's leading cigarette manufacturing company.
The company has suggested three ways to increase this differential. The ways, according to it, are : (1) increase of the resources of the agencies who prevent the foreign-made cigarettes from entering the counUy tn the first place — the Navy, the Bangladesh Rifles and the Customs. (2) preventing the open sale of smuggled cigarettes throughout the country, and (3) reduction of taxation on locally produced brand items.
Meanwhile, the government revenue in the form of excise duty on domestically produced premium cigarettes has recorded a sharp rise in first nine months of 1991.
Star Economic Report
According to Bangladesh Tobacco Company (BTC), excise duty receipts of the government totalled Taka 1548 million between January and September tn 1991. BTC’s projection on the basis of its recent sales and production performance suggests that excise duty cdllections by the government would be around Taka 2168 million in 1991 compared to actual receipts of Taka 1573 million in 1990, Taka 1601 million in 1989, Taka 1154 million in 1988 and Taka 565 million tn 1987.
The estimated annual increase of Taka 600 million in government s excise duty collections In 1991 over that of 1990 has been due to tightening of anti-smuggling operations, according to the company.
BTC sources said ever more stringent government action would lead to even
greater Increases tn government revenue. The company's sales in its premium segment recorded a steady and marked rise In first nine months of 1991.
Average monthly sales rose .from 117.1 million sticks in January-March. 1991 lo 149.4 million slicks in April-June, 1991 and to 169.2 million sticks in July-September. 1991. Such sales were 110.1 million sticks in 1990, 108.5 million slicks in 1989, 93.6 million sticks in 1988 and 69.9 million sticks in 1987 on an average monthly basis.
The BTC sources said that if the trends in first nine months would persist for the rest of 199), its sales of Stale Express 555 and Gold Leaf would Increase by 45 per cent in the year compared to 1990.
A sharp increase in the cigarette excise duty rate in 1989-90 combined with a very lenient attitude of the then government towards smuggling contributed to narrowing the price difference between local and smuggled cigarettes, according to the company. It said that most of the growth In the premium segment of cigarettes went to benefit the smugglers in 1989 and 1990.