In order to protect public health in Bangladesh, the National Board of Revenue has taken a groundbreaking decision to increase cigarette taxes and prices in light of the FCTC. The National Board of Revenue has surprised everyone by significantly increasing tobacco taxes and prices. For the second time in the current fiscal year, the Bangladesh government has raised taxes and prices on all four levels of cigarettes in an unprecedented manner.
Price and tax changes for packs of 20 sticks of cigarettes
Source: National Board of Revenue, Bangladesh.
The four segments of cigarettes in Bangladesh are premium, high, medium, and low. Low-level cigarettes account for 77% of total cigarette consumption. Though the tax rates on low-level cigarettes were previously very low, the tax rates on the top three segments remained high and unchanged for many years. The total tax rate was 81.5%, which included VAT, supplementary duty (SD), and health development surcharge in the top three levels. However, the most widely sold low-level cigarettes had a total tax rate of only 76%.
On January 9, 2025, the National Board of Revenue raised the tax rate on low-level cigarettes by 7% and increased the tax rate on the three higher levels by 1.5%. As a result, Bangladesh now taxes all cigarette brands at a rate of 83%, meeting a long-standing demand from tobacco control advocates. At the same time, prices for all cigarette segments—premium, high, medium, and low—have risen substantially.
Due to its independence from political influence, the NBR has been able to take this significant action to protect public health. As a result, it is expected that both cigarette consumption and tobacco company revenues will decline. This decision marks an important structural and qualitative shift in Bangladesh’s public health and tobacco control policies.
As of last year, raising cigarette prices alone would have increased cigarette manufacturers’ profits without addressing the tax rate. Such policy of NBR has incentivized the tobacco companies to increase production and sales of cigarettes.
Additionally, companies have violated the law by printing the retail price on packages instead of the Maximum Retail Price (MRP), defrauding consumers of 200 million taka daily, or 70 billion taka annually.
Over the past seven years, I have conducted several investigative news and research to generate evidences into the flawed tobacco tax system and the absence of the MRP on cigarette packets. Discussions between politicians, including the chairman of the National Board of Revenue, and government officials regarding my findings have yielded favorable outcomes through news, presentation, seminar and workshop.
It is noteworthy that cigarette companies are now required by law to publish the MRP on their packets and sale their products to customers at the rate indicated. This year has seen the effective implementation of the government’s plan to reduce certain aspects of cigarette consumption by boosting taxes and reducing the profits of tobacco manufacturers, in addition to rising prices.
Author: Sushanta Kumar Singha is a tobacco control researcher and Ekattor Television’s special correspondent in Bangladesh.
sinhasmp@yahoo.com
