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A New Health Development Surcharge (HDS) Code Can Create a Pathway Toward a Tobacco Free Bangladesh

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In 2015 the Bangladesh government began to levy a 1 percent Health Development Surcharge (HDS) for all tobacco products, an amount of over BDT 600 Cr (~$71M) per year. The funds collected were intended to support key government programs including tobacco control and NCD prevention. Though widely celebrated as an important step toward tobacco control sustainability, the money collected through the HDS was inaccessible. The Ministry of Health (MOH) was required to request funding from the general revenue in an arduous, time-consuming process. Its 2019 tobacco control budget was paltry, at BDT 21 Cr ($2.5 million).

Important progress is now being made. The Ministry of Finance (MOF) recently issued an order to create a separate economic code for the HDS, one that would effectively establish a soft earmarking mechanism for tobacco control. The National Tobacco Control Cell at MOH is working to finalize a long-term tobacco control program that can utilize the HDS through this separate economic code. The Union and the Bloomberg partners have provided key technical support to accelerate these processes.

“When it comes to public health sustainability, it really doesn’t matter how much money is collected if you can’t access it,” explained Gan Quan. “Bangladesh was a case in point, but also proves things can change in the right direction. The new economic code significantly empowers the MOH, providing a much needed, tangible mechanism to leverage tobacco control funding.”

While there will be no formal announcement marking the new policy, the MOF detailed the changes in an official confirmation letter recently sent to the MOH. The MOH must still seek fund allocation approval from the MOF, but the process should be much smoother. Equally important is the fact that tobacco control and NCDs are now the top funding priorities for the HDS.

The MOH will share its specific plan with the MOF in April, providing details on how it will utilize the soft earmarking mechanism to fund the drafted National Tobacco Control Plan. Funding will be available in the next financial year, beginning July 2021.

“We’re confident this will be an example of good things coming to those who persevere,” said Gan Quan. “This code could be a game-changer for Bangladesh’s tobacco control sustainability, and we’re here to support that work as best we can.”