PROGGA, ATMA urge tobacco tax reform to boost revenue and protect public health

Anti-tobacco campaigners and economists on Thursday called for major reforms to Bangladesh’s tobacco taxation system in the final national budget for fiscal year 2026-27, arguing that stronger tax measures would both improve public health outcomes and significantly increase government revenue.

The call came at a post-budget press conference jointly organised by PROGGA (Knowledge for Progress) and the Anti-Tobacco Media Alliance (ATMA) at the Zahur Hossain Chowdhury Hall of the National Press Club in Dhaka.

Speakers at the event said reducing the number of cigarette price tiers, introducing a specific excise tax system and effectively raising the prices of all tobacco products would discourage tobacco use while strengthening the government’s revenue base.

Citing data from the Bangladesh Bureau of Statistics (BBS), PROGGA and ATMA noted that the country’s provisional per capita income rose by 10.27 per cent between 2025 and 2026, while prices of essential commodities increased by between 30 and 89 per cent over the same period.

In contrast, the price of low-tier cigarettes, which account for around 75 per cent of the cigarette market, increased by only 3.33 per cent, equivalent to just Tk 0.20 per stick.

The organisations said prices of medium, high and premium-tier cigarettes had risen by 15 per cent, 14.29 per cent and 13.51 per cent respectively. However, they argued that the increase was achieved through higher base prices rather than higher tax rates, allowing tobacco companies to retain a portion of the additional revenue.

According to the groups, a tobacco company would gain an additional Tk 4.25 in profit per pack following a Tk 25 increase in the price of a premium-tier cigarette pack. Had the increase come through taxation, the entire amount would have gone to the state treasury.

The speakers also criticised the proposed budget for leaving prices and taxes on bidi, jarda and gul unchanged. They expressed concern over the inclusion of nicotine pouches and heated tobacco products within the tax framework, claiming that the move would effectively legalise emerging products that pose new public health risks.

They warned that if the budget is approved in its current form, tobacco products could become increasingly affordable relative to essential goods, potentially encouraging greater use among young people and low-income groups and leading to higher rates of tobacco-related illness and mortality.

Professor Dr Rumana Huque of the Department of Economics at the University of Dhaka said merging the low and medium cigarette tiers, setting a retail price of Tk 100 per 10-stick pack and imposing a specific excise tax of Tk 4 per pack across all categories, in addition to the existing tax structure, would generate additional revenue while strengthening public health protection.

Doulot Akter Mala, President of the Economic Reporters’ Forum, stressed the need to raise prices across all tobacco products to place them beyond the purchasing capacity of young people and lower-income consumers.

Experts at the event further recommended introducing a uniform price and tax rate for filtered and non-filtered bidis, setting the retail price of a 20-stick bidi pack at Tk 30 with a 50 per cent supplementary duty.

For smokeless tobacco products, they proposed increasing the retail price of 10 grams of jarda to Tk 60 and gul to Tk 30, accompanied by a 60 per cent supplementary duty. They also called for retaining the existing 15 per cent VAT on retail tobacco prices and maintaining the one per cent Health Development Surcharge.

The speakers claimed that implementing the tobacco tax and price proposals advanced by tobacco control advocates could generate an additional Tk 44,000 crore in government revenue while reducing smoking prevalence.

They also projected that nearly 400,000 premature deaths could be prevented over the long term, while around 500,000 adults would be encouraged to quit smoking and approximately 372,000 young peo