Proposed tobacco tax structure may make products cheaper: experts

The proposed national budget for FY 2026–27 has failed to introduce an effective tobacco tax and pricing structure that can protect public health while increasing government revenue, experts said at a press conference on Wednesday.

They warned that the marginal increase in the price of low-tier cigarettes and unchanged prices and tax rates on bidis, zarda and gul would reduce the real prices of these products, making tobacco more affordable and encouraging consumption, especially among young people and low-income groups.

The remarks were made at a post-budget press conference organised by Dhaka Ahsania Mission at the National Press Club following the announcement of the FY2026–27 national budget.

The event was addressed by Masudul Haque, president of the Bangladesh Secretariat Reporters Forum; MM Badsha, general secretary of the Crime Reporters Association; and Iqbal Masud, director of the Health Sector of Dhaka Ahsania Mission. Shariful Islam, coordinator of the Tobacco Control Project, presented the keynote paper.

The speakers said low-tier cigarette brands account for nearly 75% of the country's cigarette market and are mainly consumed by poor and young people. Under the proposed budget, the retail price of a 10-stick pack of low-tier cigarettes has been increased by only Tk2 to Tk62, a rise of just 3.33%.

They said the increase is lower than the growth in per capita income and inflation, meaning the real price of low-tier cigarettes would fall, making them more affordable and potentially increasing consumption.

The speakers said that if the government merged the low and medium cigarette tiers, fixed the retail price at Tk100 per 10-stick pack, imposed a specific supplementary duty of Tk4 per pack and increased prices of all tobacco products, it could generate nearly Tk44 billion in additional revenue compared with the current fiscal year. They added that such measures could prevent around 400,000 premature deaths in the long term.

Although prices of medium, high and premium cigarette tiers have been raised to some extent, no major reform has been introduced in the tobacco tax structure, they said. As a result, a significant portion of the price increase could become additional profit for tobacco companies, allowing them to expand their businesses.

The speakers also criticised the unchanged prices and tax rates of bidis, zarda and gul, saying these products would become cheaper in real terms and pose increased health risks, particularly for women and low-income groups.

They further raised concerns over taxes imposed on nicotine pouches and heated tobacco products, saying such measures could legitimise emerging nicotine products despite recommendations from the Health Ministry to ban them.

According to the speakers, more than 35% of adults in Bangladesh use tobacco, while nearly 200,000 people die annually from tobacco-related diseases. They estimated the yearly economic cost of tobacco-related health and environmental damage at around Tk870 billion.

They urged the government to use the final budget for FY2026–27 as an opportunity to reform the tobacco tax system by merging low and medium cigarette tiers, introducing a specific tax mechanism, increasing taxes on bidis, zarda and gul, and permanently banning emerging nicotine products, including nicotine pouches and heated tobacco products.