Tobacco tax reform can boost public health and revenue, experts say

Effective reform of the tobacco tax structure can improve public health and increase government revenue, speakers said at a discussion today (10 May).

At the meeting titled “Budget 2026–27: Advancing Public Health and Increasing Tobacco Revenue,” held at the Zahur Hossain Chowdhury Hall of the National Press Club in the capital, economists, physicians and other experts proposed reducing cigarette price tiers, introducing a specific tax system, and increasing the prices of all tobacco products.

The event, jointly organised by Progga (Knowledge for Progress) and the Anti-Tobacco Media Alliance (ATMA), was informed that if the proposals are implemented, the government could generate nearly Tk44,000 crore in additional revenue from the cigarette sector alone, while also preventing around 4,00,000 premature deaths in the long term.

The speakers proposed merging the low and medium cigarette tiers and setting the retail price at Tk100 per pack of 10 sticks. They also proposed setting the high-tier price at Tk150 and the premium-tier price at Tk200 or above. The recommendations included retaining the existing 67% supplementary duty (SD) on all cigarette tiers and introducing a specific tax of Tk4 per 10 sticks.

Dr Mahfuz Kabir, research director of the Bangladesh Institute of International and Strategic Studies (BIISS), said the price gap between low and medium tiers was very small, and that 90% of users belong to these categories. He said merging the two tiers and setting the price at Tk100 per 10 sticks would increase revenue and discourage consumption among the poor and youth.

Dr Rumana Huque, professor of Economics at the University of Dhaka, said tobacco products in Bangladesh are cheaper than essential commodities, posing a serious threat to public health, and stressed the need to make them unaffordable.

Dr Syed Abdul Hamid, professor at the Institute of Health Economics of the University of Dhaka, said the introduction of a specific tax system would simplify tax collection.

Zahirul Alam, executive director of Channel 24, said continued media coverage is needed to highlight the importance of increasing taxes and prices on tobacco products.

Public health expert Dr Lenin Choudhury urged policymakers to implement all pricing and tax-related proposals presented at the event to discourage tobacco use.

Dr Abu Jamil Faisel, president of the Public Health Association of Bangladesh, said there is no alternative to increasing tobacco prices and taxes to build a tobacco-free Bangladesh.

The proposals also covered bidi, jarda and gul.

Experts recommended introducing uniform prices and taxes for both filtered and non-filtered bidi, setting the retail price of 20 sticks at Tk30 with a 50% supplementary duty.

For smokeless tobacco, they proposed retail prices of Tk60 for 10 grams of jarda and Tk30 for gul, with a 60% supplementary duty. They also recommended retaining a 15% VAT on all tobacco products and continuing the existing 1% health development surcharge (HDS).

It was noted that tobacco use among adults aged 15 and above stands at 35.3% in Bangladesh, with nearly 2,00,000 deaths annually attributed to tobacco.

Experts said the widespread availability of tobacco products is a key reason for the high death toll.

According to a 2025 World Health Organization study, cigarette prices in Bangladesh remain significantly lower than in neighbouring South Asian countries including Sri Lanka, the Maldives, Bhutan, Nepal and India.

A total of 69 countries, including India, Thailand and Turkey, have already introduced specific taxes alongside the ad valorem system to raise tobacco prices.