Tobacco tax reform will raise revenue, reduce premature deaths: ATMA

A proposed restructuring of Bangladesh's tobacco tax system will significantly increase revenue while reducing premature deaths in the long term, according to the Anti-Tobacco Media Alliance (ATMA).

At a pre-budget discussion held today (28 April) at the conference room of the National Board of Revenue (NBR), ATMA presented a proposal to merge the low and medium tiers of cigarettes into a single tier.

The proposal recommends setting cigarette prices at Tk100 per 10 sticks for the unified lower tier, Tk150 for the high tier, and Tk200 or above for premium cigarettes.

It also suggests introducing a specific tax of Tk4 per 10-stick pack in addition to the existing 67% supplementary duty.

According to ATMA, such a reform could generate around Tk44,000 crore in additional revenue compared to the current fiscal year, while preventing approximately 400,000 premature deaths in the long run.

NBR Chairman Md Abdur Rahman Khan said at the meeting, "Increasing tobacco taxes and prices reduces cigarette consumption, as evidenced by the National Board of Revenue. Accordingly, further increases in taxes and prices will be considered in the future."

The discussion also highlighted that due to the lack of effective price adjustments, the real prices of cigarettes and other tobacco products in Bangladesh are declining, making them more affordable relative to essential commodities.

Citing World Health Organization data for 2025, speakers noted that the price of the most consumed cigarette brands in Bangladesh remains lower than in Sri Lanka, the Maldives, Bhutan, Nepal and India.

ATMA argued that introducing specific taxes alongside the existing ad valorem system is essential to effectively increase tobacco prices.

It noted that 69 countries, including India, Thailand and Turkey, have already adopted such a hybrid taxation model.

Specific taxes, the organisation said, help raise minimum prices and are easier to administer.

The alliance also proposed a uniform pricing and taxation structure for other tobacco products, suggesting Tk30 per 20-stick bidi pack with a 50% supplementary duty.

For smokeless tobacco products, it recommended setting retail prices at Tk60 per 10 grams of zarda and Tk30 per 10 grams of gul, along with a 60% supplementary duty.

It further recommended retaining a 15% VAT and a 1% health development surcharge on all tobacco products.

ATMA also cited that 35.3% of adults in Bangladesh use tobacco, with nearly 200,000 deaths annually attributed to tobacco consumption.

It added that in FY2024–25, the health and environmental damage caused by tobacco use amounted to Tk87,000 crore, around twice the revenue generated from the sector.