‘Tobacco taxes must rise to boost revenue’

State Minister for Planning Md. Junaid Abdur Rahim Saki on Monday said increasing taxes on tobacco should be a key priority in the upcoming national budget to strengthen internal revenue and expand public health spending.

He made the remarks while speaking as chief guest at a seminar titled “Necessity of Effective Tobacco Tax and Price Hikes in the Upcoming FY 2026-27 Budget to Protect Public Health”, jointly organised by the Economic Reporters’ Forum (ERF) and the Development Organisation of the Rural Poor (DORP) in Dhaka.

The state minister said reducing dependency on external debt is essential for sustainable development, stressing that stronger domestic revenue collection is crucial.

He also criticised the effectiveness of digitalisation at the National Board of Revenue, saying significant spending has not translated into improved performance.

Saki called for setting higher base prices and taxes on tobacco products to discourage consumption, while also stressing protection of workers and farmers in the sector.

He noted that ensuring fair wages would naturally increase product prices and help reduce tobacco use.
The minister also raised concerns over tax evasion through counterfeit banderols and urged the National Board of Revenue (NBR) to strengthen monitoring systems.

Special guest Md. Mashiur Rahman, First Secretary (VAT Policy) of the NBR, said cigarette supply has declined following tax measures introduced in 2024 and suggested introducing a licensing system for retail cigarette sales along with a stronger tracking system.

In his presentation, Professor Dr. Shafiun Nahin Shimul of the Institute of Health Economics, University of Dhaka, said low- and mid-tier cigarettes dominate around 90% of the market and recommended merging tax tiers with higher supplementary duties.

Former secretary Md. Azhar Ali Talukdar warned that the government spends more on treating tobacco-related health and environmental damage than it earns from the sector.

ERF President Doulat Akter Mala and General Secretary Abul Kashem also spoke at the event.