The government's move to withdraw the export duty on tobacco contradicts its own plan to discourage cultivation and consumption of the health-hazardous item.

The initiative has not only created worries about a spike in cultivation of tobacco in the land-scarce nation but has drawn criticism from some economists and anti-tobacco campaigners.

The concerns were raised after Finance Minister AMA Muhith proposed waiving 25 percent export duty on tobacco products for fiscal year 2018-19.

At the same, there is a proposal to hike the supplementary duty on low and medium segment cigarettes and the prices of hand-made tobacco stick, locally known as bidi, from next fiscal year.

“On the one hand, we are discouraging local consumption by increasing tax, and on the other, production and export of the health hazardous item are being encouraged with the withdrawal of export duty,” said Towfiqul Islam Khan, research fellow of the Centre for Policy Dialogue.

Khan said the elimination of export duty will have implication for agricultural land use. It is also contradictory to tobacco-related international conventions signed by Bangladesh.

The proposal to waive export duty comes at a time when the health and family welfare ministry is drafting the 'Tobacco Cultivation Control Policy 2017' to bar companies from encouraging farmers to grow the health hazardous crop.

The withdrawal of the export duty will have a detrimental effect, said a senior official of the National Tobacco Control Cell under the health ministry.

“Aggression of tobacco will rise. Tobacco cultivation is falling in developed economies whereas it is expanding in our country. This waiver means giving incentive to cultivation,” he said. 

The National Board of Revenue did not discuss the plan of export duty waiver beforehand. “The NBR has taken the step on its own,” the official said.

The revenue authority has received recommendations from stakeholders as part of its exercise to frame tax and duty measures for next fiscal year, said Abul Bashar Md Shafiqur Rahman, first secretary of customs policy and budget of the NBR.

“But we do not usually share what we will do,” he said, adding that the export duty has been withdrawn as per a government decision.

In his budget speech, Muhith acknowledged that tobacco is harmful to human health and the environment although it is an agricultural product.

And the government has been discouraging the production of tobacco in the last few years. At the same time, the highest rate of import duties is imposed on tobacco and tobacco products, he said.

He placed the proposal for export duty waiver with a view to reducing domestic consumption and promoting exports.

The government slapped 10 percent duty on tobacco export from 2010-11 and the rate has been increased to 25 percent at the beginning of the current fiscal year. 

The PROGGA, a platform of anti-tobacco campaigners, said the move to remove the export duty is 'reprehensible and shows sheer disregard to public health'.

“It will increase tobacco cultivation and threaten the food security of the country in the long run,” said ABM Zubair, executive director of the PROGGA.

The elimination of the export duty will inevitably encourage the production of tobacco and tobacco products and will present itself as an impediment towards becoming a tobacco-free country by 2040, the PROGGA said.

Tobacco cultivation, which hovered below 80,000 acres until 2009, shot up in subsequent years to as high as 127,000 acres in 2014-2015, according to the Bangladesh Bureau of Statistics. Tobacco was cultivated in 113,000 acres of land in 2016-17.

Tobacco exports raked in $54 million in the first 11 months of 2017-18, according to the Export Promotion Bureau.

In 2016-17, tobacco shipments fetched $46.62 million.