Leading economists and public health experts convened today at a seminar organized by Unnayan Shamannay to discuss the urgent need for comprehensive reform of Bangladesh’s cigarette tax structure. The event, titled “The Need to Reform the Cigarette Tax Structure in Bangladesh,” took place at the Bishwo Shahitto Kendro building in Dhaka.
A key recommendation emerging from the seminar is the consolidation of the current four-tier cigarette tax system (premium, high, medium, and low) into a three-tier structure by merging the low and medium categories in the upcoming 2025–26 fiscal year. This proposal aims to address the issue of consumers down-trading to lower-priced cigarettes following price increases, thereby maintaining consumption levels. Additionally, a minimum price of BDT 9 per cigarette stick was proposed.
Abdullah Nadvi, Research Director of Unnayan Shamannay, highlighted in his presentation that the forthcoming budget presents a crucial opportunity to implement this reduced tier structure and increase the minimum price.
During the panel discussion, Md. Mostafizur Rahman, former Chairman of the Bangladesh Chemical Industries Corporation, stressed the importance of shifting from percentage-based supplementary duties to specific supplementary duties across all cigarette tiers. He argued that this change, coupled with addressing the discrepancy between declared and actual selling prices, could significantly enhance government revenue. Dr. S.M. Zulfiqar Ali, Research Director of the Bangladesh Institute of Development Studies (BIDS) and chair of the seminar, echoed this sentiment, emphasizing that specific supplementary duties are vital for curbing tax evasion.
Ali Ahmad, former member of the National Board of Revenue (NBR) and former CEO of the Bangladesh Foreign Trade Institute (BFTI), underscored the NBR’s priority of public health protection in cigarette taxation over revenue generation.
Dr. Shafiun Nahin Shimul, Professor at the Institute of Health Economics, University of Dhaka, pointed out that recent marginal increases in cigarette prices have not kept pace with the substantial rise in per capita income and inflation. He noted that while essential commodity prices have surged between 9% and 84% in the past three fiscal years, cigarette prices have only increased by approximately 7% on average. Syed Yusuf Sadat, Research Fellow at the Centre for Policy Dialogue (CPD), consequently urged that future cigarette price adjustments must adequately account for income growth and inflation.
The seminar was moderated by Dr. Mahbub Hasan, Senior Research Associate at Unnayan Shamannay. The consensus among experts at the seminar was that a comprehensive overhaul of the cigarette tax structure is a timely and necessary step to enhance public health outcomes and government revenue in Bangladesh.
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