Experts call for overhaul of tobacco tax system in Bangladesh

Bangladesh is entering a crucial phase in its public health and fiscal landscape, prompting renewed attention to the effectiveness of its tobacco taxation system, experts said at a policy dialogue today (22 November). 

The Power and Participation Research Centre (PPRC) convened the national dialogue titled "Reimagining an Effective Tobacco Tax System in Bangladesh" at the PPRC Office in Dhaka, bringing together researchers, economists, public health experts, civil society representatives, youth voices, journalists and former policymakers to examine the country's persistent tobacco burden and explore pathways for stronger reform, reads a press release.

Bangladesh remains one of the world's most tobacco-prevalent countries. According to the Global Adult Tobacco Survey (GATS 2017), 35.3% of adults use tobacco, including 46% of men and 25.2% of women. The Tobacco Atlas estimates over 130,000 tobacco-related deaths in 2021, accounting for 21.9% of all deaths. Despite this, cigarettes remain highly affordable, with single sticks available for as low as Tk6, making tobacco widely accessible and undermining public health goals.

Speakers highlighted that Bangladesh's current multi-tiered tax structure, combining supplementary duty, VAT and a health development surcharge, results in a nominal 83% tax incidence yet still fails to reduce consumption because low-tier cigarettes remain artificially cheap.

Professor Shafiun Nahin Shimul, director, Institute of Health Economics, University of Dhaka, explained that the system encourages smokers to shift across price tiers rather than quit. He dispelled common myths, noting that higher taxes are pro-poor because low-income smokers are more price-responsive, that illicit trade rises due to weak enforcement rather than higher taxes, and that revenue increases when taxes rise because tobacco demand is inelastic. He also pointed out that tobacco's economic contribution is minimal, less than 1%, while its social and health harms are enormous.

Participants further discussed distortions caused by under-declared production, weak monitoring, and the absence of a track-and-trace system. Former revenue officials noted that parliamentary resistance, market informality and price manipulation often undermine reform efforts, and argued for aligning Bangladesh's tax model with regional practices and moving toward a specific excise tax system.

Concerns about youth exposure were repeatedly raised. Tobacco companies continue to place cigarettes near sweets and toys at child eye level, while the growing availability of e-cigarettes and vaping products creates new regulatory challenges. Speakers urged integrating anti-tobacco education into school programmes and strengthening restrictions to reduce adolescent access.

Several contributors highlighted the gendered and social dimensions of tobacco, noting rising smoking rates among women and the disproportionate health risks faced by women and children in bidi-producing areas. Civil society representatives emphasised that robust taxation offers a "win-win," reducing consumption by up to 25 to 30% while increasing revenue and easing pressure on the health system.

MM Fazlul Haque, former member (taxes), NBR, discussed administrative challenges, including limited enforcement capacity, the dominance of the informal market and the reliance on indirect taxation. He noted that a specific excise system is essential if Bangladesh is to reduce tax evasion, align with global standards and strengthen revenue predictability.

In his concluding remarks, Hossain Zillur Rahman, executive chairman, PPRC, emphasised that meaningful reform requires more than technical adjustments. He stressed the need for a new narrative that frames tobacco control as a moral, social and economic imperative, particularly because tobacco-growing districts remain among the poorest in the country. He called for phased, time-bound policy steps and highlighted the urgent need for updated data, noting that no national smoking survey has been conducted since GATS 2017.

Zillur also warned against falling into advocacy traps divorced from reality and called for a balanced, evidence-driven reform agenda that secures a tobacco-free, healthy future for the next generation.

The dialogue concluded with a shared understanding that a simplified and enforceable tax system, backed by stronger monitoring and updated national data, can significantly advance public health and fiscal outcomes.

Participants expressed optimism that the insights generated during the consultation will help catalyse a more effective, equitable and future-oriented tobacco tax system that strengthens national wellbeing and protects the next generation.