Tobacco industry 'misleads government to block law and tax reforms': speakers

The government has taken initiatives to strengthen the existing tobacco control law and increase taxes on tobacco products to protect public health. However, tobacco companies are reportedly misleading the government with false information to block amendments to the law and tax hikes. Multinational tobacco companies are also attempting to portray price and tax increases negatively by spreading stories of smuggling and presenting weak evidence to downplay revenue collection.

At a workshop titled Strengthening Tobacco Control Law and Tackling Industry Propaganda on Tax Hikes, held at the Economic Research Bureau (ERB) conference room of Dhaka University this morning (23 October), experts emphasised the need for swift government action against such tactics. The workshop was jointly organised by Dhaka University's ERB and the Bangladesh Network for Tobacco Tax Policy (BNTTP).

In his keynote speech, ERB project director Hamidul Islam Hillol said tobacco companies circulate false information about smuggling to prevent price increases. "Research shows most smuggling reports are almost identical and untraceable, and rarely result in arrests. Smuggling news spikes just before the national budget, and there is evidence that tobacco companies influence this trend," he said.

Hillol added that cigarette prices in Bangladesh remain lower than in neighbouring countries, making the smuggling claims misleading.

He further noted that increasing cigarette prices and tax rates does not lead to higher smuggling or illegal cigarette sales. "Revenue from cigarettes has risen from Tk5,122crore in FY2008‑09 to Tk31,077crore in FY2022‑23. Despite the 2005 tobacco control law and its strengthening in 2013, tobacco sector revenue has never declined in 20 years," he said.

During the panel discussion, tobacco control researcher and Ekattor TV special correspondent Sushanto Sinha said multinational tobacco companies inflate operational costs in financial reports to evade government revenue. He said they also sell cigarettes above the maximum retail price, reportedly evading nearly Tk5,000crore annually, while spreading claims of revenue loss.

"Amending the tobacco control law and increasing taxes is essential for public health and government revenue," he said.

Sinha recommended replacing the current multi‑tiered ad valorem tax system with a specific tax structure, suggesting an initial fixed rate of Tk1 per stick in the upcoming fiscal year. He said this change could generate an additional Tk20crore in daily revenue while supporting public health objectives.

The workshop was attended by 20 journalists from national media, who provided recommendations on tobacco law amendments and revenue strategies. Ibrahim Khalil, senior project and communication officer at ERB, moderated the session.