Experts and anti-tobacco advocates have called for a fundamental restructuring of Bangladesh’s cigarette tax framework, proposing a reduction in price tiers from four to three in the forthcoming national budget for FY 2025-26. This reform is expected to generate an additional Tk20,000 crore in revenue while discouraging smoking, particularly among young people and low-income groups.
Speaking at a workshop titled "Tobacco Tax and Price Measures: Budget FY 2025-26," held at the BIP Conference Room in the capital on 12-13 March, speakers highlighted that the existing four-tier pricing system—low, medium, high, and premium—has rendered tax measures ineffective. The minimal price difference between the low and medium tiers allows consumers to switch brands within these categories without facing a significant financial deterrent. Merging these two tiers into a single category could close this loophole and increase government revenue.
The event, jointly organised by PROGGA (Knowledge for Progress) and the Anti-Tobacco Media Alliance (ATMA), was attended by 50 journalists from print, television, and online media outlets.
Experts underscored that tobacco products in Bangladesh remain relatively cheap due to an ineffective tax structure, making them increasingly affordable in comparison to essential commodities. An analysis of average retail prices across seven metropolitan cities—Dhaka, Chattogram, Rajshahi, Khulna, Sylhet, Barisal, and Rangpur—between 4 July 2021 and 4 July 2023, based on data from the Department of Agricultural Marketing (DAM), revealed significant price hikes in essential goods.
During this period, the price of loose sugar rose by 89%, potatoes by 87%, loose flour by 75%, pangash fish by 47%, eggs by 43%, soybean oil by 34%, powdered milk by 30%, and broiler chicken by 27%. In contrast, cigarette prices across various tiers saw only a 6-15% increase, making them more accessible, particularly to the youth and economically disadvantaged populations.
To address these issues, the workshop presented a series of budget proposals:
1. The low and medium tiers should be merged, with the price of 10 sticks in this combined tier set at Tk90.
2. The high-tier cigarette price should remain at Tk140 per 10 sticks.
3. The premium-tier price should be increased to Tk190 per 10 sticks.
4. The supplementary duty (SD) on all cigarette tiers should remain at 67%.
5. For non-filtered bidis, the retail price should be Tk25 for 25 sticks, while for filtered bidis, it should be Tk20 for 20 sticks, both subject to a 45% SD.
6. For smokeless tobacco, the price of 10 grams of jarda should be Tk55, and gul should be Tk30, both subject to a 60% SD.
7. A 15% VAT on retail prices and the existing 1% health development surcharge (HDS) should be retained.
Potential Impact
Experts stressed that implementing these proposals could significantly aid the government in meeting its revenue targets while simultaneously curbing tobacco consumption. The additional revenue of Tk20,000 crore could be allocated to essential public health initiatives. In the long run, these measures could help prevent premature deaths among 1.7 million Bangladeshis, including approximately 900,000 young people.
Among the notable speakers at the workshop were Kawser Rahman, City Editor of The Daily Janakantha; Md. Sajjadur Rahman, Deputy Editor of The Business Standard; Mortuza Haider Liton, Convener of ATMA; Nadira Kiron and Mizan Chowdhury, Co-conveners of ATMA; ABM Zubair, Executive Director of PROGGA; and Md. Hasan Shahriar, Head of Tobacco Control at PROGGA.
The recommendations from the workshop are now in focus as policymakers prepare the national budget, with hopes that a more effective tax structure will lead to both economic and public health gains.
