Biri is a traditional form of hand-rolled cigarettes that are largely non-filtered, popular among lower income smokers and produced in highly labor-intensive small-scale manufacturing units in Bangladesh (and several other countries in the region). The tax and prices of biri (also spelled bidi or beedi) have remained extremely low, and more importantly, much lower than the tax and prices of machine-made cigarettes. Raising tax on biri has been vehemently opposed by biri manufacturers on the grounds of loss of employment and income of biri workers. The National Board of Revenue (NBR) of the Ministry of Finance of the Government of Bangladesh has been constrained by a lack of any credible estimate of the size of employment and income generated in the biri sector to make a bold step in raising biri tax and prices.

To overcome this challenge to biri tax increases, a study on the employment and revenue outcome of a biri tax increase was initiated by the NBR in 2012 under the auspices of the World Health Organization (WHO) and the Department of Economics, University of Dhaka. NBR released an updated report of this study in 2019 with technical assistance from the American Cancer Society (ACS), the BRAC Institute of Governance and Development (BIGD) and WHO.

The study estimated that the biri industry provides total full-time equivalent employment of 46,916 of adult workers (aged 15 and above). These workers were generally identified with the underemployed, low income, resource poor population of Bangladesh, living below the poverty line and excluded from the mainstream of economic development.

The study also estimated that tax and price changes at the recommended level and a concomitant declining trend of the biri industry together would cause loss of 8,874 full-time equivalent employment. As these workers lack household resources, education and skill to make a smooth transition to alternative livelihood options on their own, government support is needed to train and re-deploy biri workers in new jobs. Due to a heavy concentration of biri factories in economically depressed regions, further government actions would be necessary to boost generation of employment opportunities in those regions.

But the vitally important counterpoint to these findings is: the health and economic gains from increasing biri tax and prices are enormous. The study estimated that nearly 400,000 premature deaths attributable to biri smoking can be averted by increasing excise tax on this product at the recommended level, while annual tax revenue from biri would more than double. The study concluded that biri workers can be easily compensated for their income loss if the extra revenue generated from increasing tax on biri is used for creating new employment opportunities for these workers. This would be a health and prosperity win-win-win scenario for Bangladesh.

By Nigar Nargis