Tobacco tax plan falls short on cutting consumption and raising revenue

Public health experts have criticised the proposed national budget for FY 2026–27, saying it fails to introduce a tobacco tax and pricing structure capable of reducing tobacco consumption while increasing government revenue.

Speaking at a post-budget press conference organised by Dhaka Ahsania Mission at the National Press Club on Wednesday, the speakers warned that the proposed measures would effectively make tobacco products more affordable in real terms, particularly for young people and low-income consumers.

The event was addressed by Masudul Haque, President of the Bangladesh Secretariat Reporters Forum, MM Badsha, General Secretary of the Crime Reporters Association, and Iqbal Masud, Director of the Health Sector of Dhaka Ahsania Mission. Shariful Islam, Coordinator of the Tobacco Control Project, presented the keynote paper.

According to the speakers, nearly 75 per cent of Bangladesh’s cigarette market consists of low-tier brands, which are predominantly consumed by poorer and younger smokers. Under the proposed budget, the retail price of a 10-stick pack of low-tier cigarettes has been increased by only Tk 2, from Tk 60 to Tk 62, representing a rise of just 3.33 per cent.

They argued that because inflation and per capita income growth have exceeded this increase, the real price of low-tier cigarettes will decline, making them more affordable and potentially encouraging higher consumption.

The speakers said the government could generate almost Tk 44 billion in additional revenue compared with the current fiscal year by merging the low and medium cigarette tiers, setting the retail price of a 10-stick pack at Tk 100, imposing a specific supplementary duty of Tk 4 per pack and increasing the prices of all tobacco products.

They also claimed that such measures could prevent around 400,000 premature deaths over the long term.

Although the budget proposes some price increases for medium, high and premium cigarette categories, the speakers said no significant reform had been introduced to the existing tobacco tax structure. As a result, they argued, much of the price increase would likely boost tobacco company profits rather than reduce consumption.

Concerns were also raised over the decision to leave the prices and tax rates of bidis, zarda and gul unchanged. The speakers said this would effectively reduce their real prices and make them more accessible, particularly among women and low-income groups, thereby increasing health risks.

They further criticised the government’s decision to impose taxes on nicotine pouches and heated tobacco products while not implementing the Ministry of Health’s recommendation to ban them. According to the speakers, the move effectively legitimises these emerging nicotine products and could lead to a new generation of nicotine users.

Citing public health data, the speakers said more than 35 per cent of adults in Bangladesh use tobacco and that nearly 200,000 people die each year from tobacco-related diseases. They estimated the annual economic burden of tobacco-related health and environmental damage at approximately Tk 870 billion.

The speakers noted that preventing tobacco-related non-communicable diseases remains a key government commitment and highlighted the recent enactment of the Amended Tobacco Control Act 2026. They also referred to repeated commitments by the Head of Government to protect children, adolescents and young people from the harms of tobacco and nicotine products.

Calling for stronger action in the final budget, the speakers urged the government to reform the tobacco tax and pricing structure, merge the low and medium cigarette tiers, introduce a specific tax system, increase taxes on bidis, zarda and gul, and permanently ban emerging nicotine products, including nicotine pouches and heated tobacco products.

They said such measures would help protect public health while significantly boosting government revenue.