Raising tobacco taxes: The push must be stronger
Increasing tobacco taxes is a globally recognised and effective strategy for strengthening tobacco control. However, Bangladesh’s tobacco tax system has several limitations
Tobacco-related issues have been identified as a serious public health crisis in Bangladesh. According to the 2019 data from the Tobacco Atlas, approximately 161,000 people die each year in the country due to tobacco use—an average of 442 deaths per day.
Tobacco affects 76.2 million people in the country, including 37.8 million direct tobacco users and 38.4 million individuals exposed to secondhand smoke.
According to the Global Youth Tobacco Survey, the highest rates of smoking addiction among adolescents aged 13 to 15 are found in India, Indonesia, and Bangladesh. In Bangladesh, nearly 12% of adolescents are regular smokers.
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According to the World Health Organisation (WHO), one of the most effective tobacco control policies is increasing the price of tobacco products, primarily through taxation. Raising tobacco prices discourages smoking, particularly among low- and middle-income individuals and the youth.
Studies have shown that a 10% increase in price reduces tobacco use by 4% to 6% on average. Poorer individuals and young people are the most affected by these price hikes. It is estimated that imposing higher taxes on tobacco will reduce its consumption and gradually decrease tobacco-related diseases, ultimately lowering healthcare costs. Moreover, increased taxation will boost government revenue, allowing for greater investment in the healthcare sector.
Increasing tobacco taxes is a globally recognised and effective strategy for strengthening tobacco control. However, Bangladesh's tobacco tax system has several limitations.
Currently, cigarettes in Bangladesh are taxed at four tiers—low, medium, high, and premium.
This complex tax structure creates loopholes for tax evasion and makes cheap cigarettes easily accessible at the lower tier. Although Bangladesh has a tax structure in place for cigarettes, bidis, and other tobacco products, its inefficiencies prevent significant reductions in tobacco use.
In the fiscal year 2025-26 budget, if the lower and middle tiers are merged and the minimum retail price per cigarette stick is set at Tk90, along with a supplementary duty of 67% on all cigarette tiers, tobacco consumption will decline. Additionally, setting the minimum price for a pack of 10 high-tier cigarettes at Tk140 and premium-tier cigarettes at Tk190 will contribute to reducing tobacco use and serve as an effective measure to protect public health.
Between the fiscal years 2019-20 and 2024-25, cigarette prices have gradually increased across all tiers. However, a sharp price hike is necessary to reduce smoking rates significantly. Small, incremental price increases fail to keep up with inflation, making cigarettes relatively more affordable than other products.
Therefore, in the upcoming fiscal year 2025-26, a substantial one-time price increase will enhance the real price of cigarettes and curb their consumption. Otherwise, tobacco companies will continue targeting young people through various promotional campaigns. If tobacco prices rise, the initiation rate among youth will decline, protecting future generations from the harmful effects of tobacco.
Bangladesh's existing tobacco tax structure is highly complex and insufficient to deter tobacco use. If the proposed tax increase on tobacco products is implemented in the upcoming 2025-26 budget, the government could generate revenue of Tk680 billion, which is Tk200 billion more than the expected revenue for the fiscal year 2024-25—an increase of 43%!
In the long term, 1.7 million deaths could be prevented (including 864,758 adults and 869,079 young individuals). Additionally, 2.4 million adults could be discouraged from smoking, and 1.7 million youths could be prevented from starting to smoke.
Therefore, to protect public health and ensure a healthier future for the current and upcoming generations, now is the right time to increase taxes and prices on tobacco products. Without delay, effective taxation should be imposed on tobacco products to safeguard the nation and future generations from the dark shadow of the tobacco industry.
Dr Nizam Uddin Ahmed is a senior public health specialist. He is the Executive Director, Shastho Shurokkha Foundation.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
