Call to set minimum cigarette price at Tk 9 in low, middle tiers

Tobacco control advocates have called for setting a minimum price of Tk 9 per cigarette stick in the lower and middle tiers, saying the current pricing system is not enough to desirably curb smoking.

Both tiers should be merged into a new category to set the minimum price per stick, they said at a workshop in Dhaka on Wednesday, adding that without this measure, it would not be possible to reduce cigarette consumption to a desired level. 

The complex multi-tiered ad valorem tax system has led to only a 7.3 per cent increase in cigarette prices, which is negligible compared to the rising costs of other essential goods, speakers noted. 

Cigarette sales have increased at an average rate of 4.0 per cent per year, while midway through the current fiscal year, the National Board of Revenue (NBR) imposed a uniform 67 percent supplementary duty on all cigarette tiers, they added at the workshop on effective taxation and price increases of tobacco products in the upcoming budget, held at the Economic Reporters' Forum (ERF) office.  

ERF president Doulot Akter Mala said that if the proposed tax measures from tobacco control organisations had been implemented over the past five fiscal years, additional revenue collection could have increased by 11 per cent to 28 per cent.  

She added that raising cigarette prices as per the proposal while maintaining the current 67 per cent supplementary duty could boost revenue by 43 per cent in the next fiscal. However, research indicates that in FY 2017-18, Bangladesh spent 34 per cent more on treating tobacco-related diseases than it collected in tobacco taxes, she said. 

DORP deputy executive director Mohammad Zobayer Hasan, who presented the keynote at the event, noted that the market currently has four tiers of cigarettes: low, medium, high, and premium. Even after the price increase this fiscal year, the cheapest cigarette stick is still being sold at Tk 6.0. 

To reduce affordability, the minimum price of a cigarette stick should be set at Tk 9.0 in the upcoming 2025-26 fiscal year, he said. 

Hasan noted that 90 per cent of cigarette sales occur in the lower and middle tiers. While per capita cigarette sales among adults have remained stable over the years, sales in these two tiers have increased. 

To address this, he proposed combining the lower and middle tiers and setting cigarette pack (10 sticks per pack) prices at Tk 90, Tk 140, and Tk 190 for the three new tiers. If implemented, the proposal could discourage 1.7 million young people from taking up smoking and prevent 870,000 premature deaths in the long term, he said. 

DORP founder and chief executive AHM Noman, who chaired the event, said raising taxes on tobacco products is a cost-effective measure to achieve sustainable development goals (SDGs) related to tobacco control. He added that the proposed tax reforms for cigarettes in the 2025–26 fiscal year would help build a healthier nation while financing health sector priorities, supporting national development initiatives, and enhancing tax system sustainability.

Press Secretary to the Chief Adviser Mohammad Shafiqul Alam attended the workshop as the chief guest, while NBR Member (VAT Policy) Dr. Md Abdur Rouf was the special guest. 

ERF general secretary Abul Kashem moderated the event. 

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