Prof Dr. Mohammad Siddiqur Rahman Khan :
The landscape of public health in Bangladesh is at a crucial turning point. Over the years, various government initiatives have aimed to reduce the burden of non-communicable diseases and address preventable causes of death. One of the most persistent threats remains – that continues to exact a heavy toll, both in human lives and national economy.
In 2018 alone, more than 161,000 people in Bangladesh lost their lives from tobacco-related diseases such as heart disease, lung ailments, and cancer.
These are not isolated incidents but part of a broader pattern that has significant health and economic consequences. According to estimates from FY 2017-18, tobacco-related healthcare costs and productivity losses amounted to BDT 305 billion, while the revenue collected from tobacco taxes stood at BDT 228 billion.
The resulting deficit – BDT 77 billion – is not merely an amount but a reflection of the imbalance between public expenditure and revenue generation.
Yet for years, tobacco products, particularly low-tier cigarettes, have remained within easy reach of large segments of the population. With over 75 per cent of cigarette users concentrated in the low-price category, the affordability of tobacco continues to undermine the country’s public health goals.
Compounding the issue, the narrow price gap between low and medium-tier cigarettes allows consumers to shift between tiers instead of quitting, blunting the impact of incremental tax increases.
Recent fiscal policy adjustments have begun to change this narrative. In FY 2024-25, the National Board of Revenue (NBR) implemented notable tax and price revisions across all four cigarette tiers.
These included a rise in the supplementary duty to 67 per cent and an increase in retail prices-from BDT 50 to BDT 60 for low-tier cigarettes, and from BDT 70 to BDT 80 for medium-tier products. Even premium brands saw an uptick in price and taxation.
The move was widely applauded NBR, earning Bangladesh the World No Tobacco Day Award 2025 from the World Health Organization.
Importantly, these measures have already started to yield results: British American Tobacco Bangladesh (BATB), the country’s leading tobacco company, reported a 7 per cent drop in cigarette stick sales in Q1 of 2025 following the tax hike.
At the same time, their contribution to government revenue rose significantly-BATB paid BDT 7,733 crore in supplementary duty and VAT during the quarter, an increase of BDT 320 crore from the previous year’s BDT 7,412.89 crore.
This reflects how strategic taxation can simultaneously reduce consumption and boost fiscal earnings-a dual benefit that reinforces the need for continued reform.
Building on this momentum, long-term success requires that such reforms be both comprehensive and strategically targeted. This is why civil society organizations have come forward with proposals for the upcoming FY 2025-26 budget that merit serious consideration.
Central to their recommendations is the merger of the low and medium-tier cigarettes into a single category, with a proposed maximum retail price of BDT 90 for a 10-stick pack.
The rationale is simple: removing the option to downshift to cheaper brands encourages quitting rather than brand-switching. Alongside this, the proposed structure retains the high-tier price at BDT 140 and raises the premium-tier price modestly to BDT 190.
A consistent tax framework – including a 67 per cent supplementary duty, 15 per cent VAT, and a 1 per cent health development surcharge-across all tiers.
The expected outcomes of such reforms are significant. If implemented, they could help nearly 2.4 million adults to quit smoking and prevent 1.7 million young people from starting.
In terms of fiscal impact, the government could expect around BDT 680 billion in tobacco tax revenue – a 43 per cent increase compared to the current total. These additional funds could be strategically redirected to areas like public health, health education, and social mass awareness – sectors that underpin inclusive NCD prevention.
This approach aligns well with Bangladesh’s broader goals: to reduce the prevalence of non-communicable diseases, raise the tax-to-GDP ratio, and fulfil commitments under the Sustainable Development Goal 03. It also supports economic stability by increasing predictability and efficiency in the tax regime.
Tobacco taxation is not just a fiscal matter – it is a matter of national strategic moves. I believe the proposed reforms represent a rare opportunity for Bangladesh to take decisive action. By addressing affordability and streamlining the tax structure, the country can move closer to a future defined by public health goal, and responsible governance.
This is the right moment to act boldly. The decisions we make today will shape the health and prosperity of the generations to come.
(The writer is Dean, Faculty of Arts, University of Dhaka).
