‘Affordability of cigarettes needs to be reduced through effective taxation’

The government loses Tk 66 billion annually due to the absence of effective taxation on cigarettes, according to non-government think tank Unnayan Shamannay.

Referring to a recent initiative of the interim government for effective cigarette taxation in the middle of ongoing fiscal year, Unnayan Shamannay’s Research Director Abdullah Nadvi said the initiative would help the government to get around Tk 50 billion of additional tax from cigarette sales.

Additional Tk 20 billion would be added to the revenue amount if the government could take the decision in at the beginning of the year, he said while presenting the keynote paper at a press conference on cigarette taxation in the next fiscal year on Monday.

Unnayan Shamannay arranged the press conference at the Zahur Hossain Chowdhury Hall of the Jatiya Press Club, according to a press release.

Dr. Shafiun Nahin Shimul, Professor of Health Economics Institute of Dhaka University; Dr. Suzana Karim, Associate Professor of Health Economics Institute of Dhaka University; and Dr. Nazmul Islam, Associate Professor of BUET were present as expert discussants.

Babu Kamruzzaman, a special correspondent of News 24; and former national footballers Kaiser Hamid and Sheikh Mohammad Aslam were present as civil society representatives.

Speakers at the event said the government increased retail prices of all cigarettes and raised supplementary duties on all tiers of cigarettes to 67 per cent.

“This will reduce smoking prevalence and secure additional revenue for the government. However, further benefits could have been ensured if these measures were taken at the beginning of the fiscal year,” they said.

Kaiser Hamid and Sheikh Aslam both opined that the policymakers ought to emphasize safeguarding the youth from the harms of cigarettes instead of focusing on collecting additional taxes from cigarette taxes.

Dr. Shimul pointed out that in January 2025, for the first time, the supplementary duty rate on low-tier cigarettes have been raised to the level of that on other higher-tier cigarettes (67 per cent). As the youth usually consumes the low-tier cigarettes, rising taxes on these cigarettes must be considered as a welcome move.

Dr. Nazmul opined that through ensuring effective cigarette taxation in FY2025-26, smoking prevalence can be reduced desirably, and on the other hand, tax collection from cigarette sales may be increased by 20 per cent.

Tiers of cigarettes should be reduced from four to three- urged Dr. Suzana Karim and she opined that if this is done then tax collection will become easier, and smoking prevalence will be reduced at the same time.

Unnayan Shamannay’s Head of Programme Shaheen Ul Alam moderated the session.