FY26: Unchanged tobacco tax in proposed budget may cost government Tk20,000cr, say experts
In a joint response, PROGGA (Knowledge for Progress) and the Anti-Tobacco Media Alliance (ATMA) stated that the decision to maintain the existing price structure will hamper efforts to reduce tobacco consumption and safeguard public health
The proposed budget for fiscal year 2025–26 (FY26) fails to revise cigarette prices or tax rates across all tiers, prompting concern from anti-tobacco organisations who say the government is missing out on at least Tk20,000 crore in additional revenue and risking increased tobacco use among youth.
In a joint response, PROGGA (Knowledge for Progress) and the Anti-Tobacco Media Alliance (ATMA) today (2 June) stated that the decision to maintain the existing price structure will hamper efforts to reduce tobacco consumption and safeguard public health.
They called for an increase in the prices of all cigarette tiers and the merger of low and medium tiers—which currently account for 80% of the market—into a new tier with a minimum retail price of Tk90 for 10 sticks.
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The proposed budget keeps the prices of bidis unchanged for the sixth consecutive time, and the supplementary duty remains static for the tenth time.
Taxes and prices for smokeless tobacco products, including jarda and gul, also remain the same.
This is particularly worrying, the organisations said, as over half of tobacco users consume smokeless products, mainly among poorer communities and women.
When inflation and rising per capita income are considered, these products are effectively becoming cheaper and more accessible, which could increase usage and health risks.
The budget does include a few changes.
The advance tax on the net sale price of cigarette manufacturers is set to increase from 3% to 5%, and the supplementary duty on imported cigarette paper will rise from 150% to 300%. While these moves are seen as positive, PROGGA and ATMA said they are insufficient.
"Tobacco claims 442 lives each day in Bangladesh. The proposals put forth by anti-tobacco activists, if realised, would reduce tobacco use and tobacco-related deaths and raise revenue earnings of the government," PROGGA Executive Director ABM Zubair said.
According to PROGGA, 35.3% of adults aged 15 and above use tobacco. If anti-tobacco proposals were adopted, they estimate it could prevent the premature deaths of 1.7 million people, including 900,000 youth.
