Tobacco imports decreased by 53.2% this year compared to the same quarter last year

Tobacco imports decreased by 53.2% this year compared to the same quarter last year

The country imported tobacco and tobacco-related products worth Nu 0.12 billion (bn) this year in the 1st quarter of 2023, which was a reduction by 53.2% compared to the previous year (2022) of the same quarter. Bhutan imported tobacco and tobacco products worth Nu 0.22 billion in the same quarter of the previous year.

According to reports from the Department of Revenue and Customs (DRC) that were recently published, Bhutan imported tobacco and tobacco products worth Nu 124.694 million from India, while Nu 77,665 of the same was imported from other countries.

The DRC data shows that the country imported cigarettes containing tobacco in 26,643,980 quantities worth 122.05 million cigarette sticks from India, marking the highest import in both quantity and value under the import category of tobacco and related products.

It also shows the import of other manufactured tobacco and manufactured tobacco substitutes, such as 728,979 quantities of “biri” worth Nu 0.342 mn, 322 numbers of chewing tobacco worth Nu 94,127, Jarda (scented tobacco) worth 3,829 quantities of Nu 1.792 mn, and snuff with 415 numbers worth Nu 92,553, while 429 quantities of other worth Nu 317,820 were imported from India alone.

In the first quarter of 2022, Bhutan imported 0.242 billion sticks of cigarettes containing tobacco. Out of this, Nu 242.56bmn worth of tobacco was imported from India, while Nu 5,572 came from other countries. The DRC data also shows that the country imported biri, chewing tobacco (Khani) and snuff worth Nu 10.96mn, Nu 11.534mn and Nu 780,950 respectively in the first quarter of 2022.   

Statistics indicate that the tobacco market import was growing prior to the cancellation of the ban on import and sale of tobacco products from July 2021.With the lifting of the ban and the amendment of the Tax Act of Bhutan 2021, which came into force in July 2021, the sales tax on tobacco was revised from 100 percent to zero.

However, in November 2022, the government reinstated the 100 percent sales tax on tobacco and increased customs duty on tobacco import by 10 percent under the Tax Act of Bhutan 2022. The implementation of this lead to reduction in the import of tobacco in the first quarter of this year. 

Before the ban, an individual was allowed to import only 800 sticks of cigarettes, 1,200 sticks of bidis, 150 pieces of cigars, or 750 grams of other tobacco or tobacco products.

The country continued to ban production and manufacturing of tobacco products with in the country. The sale and production of tobacco and tobacco products to minors and smoking in public places is still prohibited and defaulters are liable for a fine.

For instance, if a person is seen smoking in a “no smoking area”, they will be fined Nu 50 per incident of smoking. No smoking signs should also be displayed and those failing to do are liable for a fine of Nu 1,000 per incident. Nu 1,000 is payable by the person in charge (per person smoking in the no-smoking area of the premise), respectively.

The purpose of the amendment to the Tax Act was to address inflationary pressure on essential food items and reduce consumption of harmful products that are damaging to health and the environment.

Nidup Lhamo from Thimphu