Proposed budget risks higher tobacco consumption and lost revenue
Anti-tobacco advocacy groups PROGGA (Knowledge for Progress) and the Anti-Tobacco Media Alliance (ATMA) have expressed concern that the proposed national budget for fiscal year 2026-27 will make tobacco products more affordable, potentially increasing tobacco consumption while depriving the government of significant additional revenue.
In a joint quick budget reaction following the presentation of the proposed budget on Thursday, the two organisations said the government had introduced only a marginal increase in the price of low-tier cigarettes while leaving the prices and tax rates of bidis, gul and jarda unchanged.
According to the proposed budget, the retail price of a 10-stick pack of low-tier cigarettes will rise by Tk2, from Tk60 to Tk62. PROGGA and ATMA argued that the 3.33 per cent increase falls well below the estimated 10.27 per cent rise in per capita income, effectively reducing the real price of cigarettes over time.
They warned that such a decline in real prices could encourage greater tobacco use, particularly among young people and low-income groups. Low-tier cigarette brands currently account for around 75 per cent of Bangladesh’s cigarette market.
The budget proposes increasing the price of a 10-stick pack of medium-tier cigarettes from Tk80 to Tk92, a 15 per cent rise. High-tier cigarettes would increase from Tk140 to Tk160, while premium-tier cigarettes would rise from Tk185 to Tk210.
However, PROGGA and ATMA maintained that these increases remain modest compared with the rising cost of essential commodities and would have limited impact on reducing tobacco consumption.
The organisations also criticised the government’s decision not to undertake structural reforms of the tobacco tax system. They said the budget does not reduce the number of cigarette price tiers or introduce a specific excise tax system, leaving the existing tax structure largely unchanged.
They argued that without such reforms, tobacco companies would capture much of the additional revenue generated through price increases.
PROGGA and ATMA proposed merging the low and medium cigarette tiers and setting the retail price of 10 sticks at Tk100. They also recommended introducing a specific tax of Tk4 per 10 sticks in addition to the existing 67 per cent supplementary duty.
According to the organisations, implementing these measures and raising prices across all tobacco products could generate an additional Tk44,000 crore in government revenue and prevent approximately 400,000 premature deaths.
The groups further expressed concern over the decision to leave the prices and taxes of bidis, jarda and gul unchanged, saying this would make these products even more affordable, particularly among poorer households and women.
The proposed budget sets the price of a 10-gram nicotine pouch at Tk500 and 10 sticks of heated tobacco products at Tk210, with supplementary duties of 40 per cent and 67 per cent respectively. It also proposes a 350 per cent supplementary duty on imports of nicotine granules and nicotine pouches, while recommending the adoption of a track-and-trace system to monitor the production and supply of tobacco products.
Commenting on the budget, PROGGA Executive Director ABM Zubair said: “If the proposed budget is passed as it is, it will render tobacco products even cheaper and more affordable. It will also encourage the youth and the low-income demographic into tobacco use, thus increasing tobacco-related diseases and deaths.”
The organisations noted that 35.3 per cent of Bangladeshi adults use tobacco and that tobacco-related diseases claim around 200,000 lives annually. They also estimated that the health and environmental costs associated with tobacco use and production result in annual economic losses of nearly Tk87,000 crore.
Against this backdrop, PROGGA and ATMA urged policymakers to incorporate the reform proposals advanced by anti-tobacco organisations in the final budget to protect public health and increase government
