Increase Cigarette Taxes to Improve Public Health, Revenue

Dialogue on imposing effective tax on tobacck in 2025

Dhaka, January 7, 2025: A national-level Dialogue was held today at the Sheraton Hotel in Dhaka, organized by the Shastho Shurokkha Foundation. The event brought together concerned citizens, university students, academics, researchers, civil society members, and high-ranking officials from government and non-governmental organizations to advocate for effective tobacco taxation to

safeguard public health and boost government revenue.

The keynote presentation revealed that Bangladesh has the highest tobacco use rate in South Asia, at 35.3%. Annually, approximately 161,000 adults die prematurely due to tobacco-related diseases.

Moreover, the government spends 34% more on treating tobacco-induced illnesses than the revenue it generates from the tobacco industry.

To reduce tobacco consumption and mitigate the damages caused by tobacco, the meeting proposed several recommendations for the upcoming 2025-26 fiscal year's budget, including a significant increase in tobacco taxes. Key proposals include: Consolidating cigarette tiers: Reducing the current four tiers of

cigarettes to three by combining the lower and middle tiers into a single tier. The minimum price for a pack of 10 cigarettes in this tier should be set at 80 taka. Increasing excise duty: Imposing a 67% excise duty on all tiers of cigarettes. Raising prices for higher tiers: Setting a minimum price of 130 taka for a pack of 10 high-tier cigarettes and 180 taka for a pack of 10 premium-tier cigarettes.

It was highlighted that implementing these proposed tobacco tax increases would prevent approximately 1.6 million premature deaths, deter about 1.6 million youth from starting to smoke, encourage around 2.3 million adult smokers to quit, and generate approximately 60 billion taka in revenue in the 2025-26 fiscal year.

Distinguished guests at the event included Md. Shahidul Islam, former Member of the NBR; Ms. Roksana Khan, Joint Secretary, Internal Resources Division, Ministry of Finance; Dr. Md. Shibbir Ahmed Osman, Joint Secretary (Public Health Wing), Ministry of Health and Family Welfare; Mr. Md. Mahsin, Joint Secretary (Director General, Autism Cell), Ministry of Health and Family Welfare; Dr. Nizam Uddin Ahmed, Executive Director, Health Security Foundation, Chair, Global Alliance for Vaccines and Immunization (GAVI), CSO Steering Committee; Professor Dr. Golam Mahiuddin Faruk, President, Bangladesh Cancer Society; Dr. S.M. Zulfiqar Ali, Research Director, BID; and Sushant Sinha, Special Correspondent, Ekattor TV.

Dr. Md. Shibbir Ahmed Osmani, Joint Secretary (Public Health Wing), Ministry of Health and Family Welfare, emphasized the need to increase specific taxes in line with inflation and income growth to reduce the availability of tobacco products; to narrow the gap in excise duty and price between cigarette tiers to discourage consumers from switching to lower-tier cigarettes; and to gradually introduce a single-tier pricing system.

Dr. Md. Shahidul Islam, former Member of the NBR, highlighted that increasing tobacco taxes is an internationally recognized method to discourage tobacco use. However, tobacco products are very cheap and easily accessible in Bangladesh, and the tobacco tax structure is flawed. This has made it difficult to discourage young and poor people from using tobacco. The increasing deaths and illnesses

caused by tobacco use are also increasing government healthcare costs.

Roksana Khan, Joint Secretary of the Internal Resources Division, Ministry of Finance, suggested increasing the prices of all types of cigarettes in line with inflation and income growth, increasing the excise duty on lower-tier cigarettes to at least 70% of the retail price, and replacing the multi-tier ad valorem tax system on cigarettes with a uniform specific or mixed (specific and ad valorem) tax system could increase revenue and improve public health.

Dr. Nizam Uddin Ahmed, Executive Director of the Shastho Shurokkha Foundation, Chair of the Global Alliance for Vaccines and Immunization (GAVI), and Chair of the CSO Steering Committee, stated that a smoke-free society is essential for a healthy and prosperous nation. According to the World Health

Organization, tobacco use causes 8 million deaths annually. Of these, 7.1 million deaths are directly attributable to tobacco use and nearly 900,000 are due to secondhand smoke. Among adolescents aged 13-15 (according to the Global Youth Tobacco Survey-2013), 6.9% use some form of tobacco, with 9.2% of boys and 2.8% of girls reporting tobacco use. Our goal should be to reduce this percentage to zero. By increasing taxes on tobacco products, we can achieve this goal soon. Therefore, I request the current caretaker government to play a significant role in protecting public health by increasing taxes on tobacco products in the upcoming 2025-26 fiscal year.

Professor Dr. Golam Mahiuddin Faruk, Director of the Bangladesh Cancer Society, said that tobacco use increases the risk of heart disease, stroke, COPD, or lung cancer by 57% and other types of cancer by 109%. There is no alternative to increasing taxes on tobacco products to reduce tobacco use.

Sushant Sinha, Special Correspondent of Ekattor TV, said that increasing the price and tax rate of tobacco products and making them unaffordable for people is the most effective and affordable way to control tobacco use. The poor and adolescents are most affected by this. High prices will discourage adolescents from using tobacco. Research shows that a 10% increase in price will reduce tobacco use in Bangladesh by 7.1%. He further added that when the price of a single cigarette includes a fractional amount, sellers increase the fractional part and sell it for a full taka. As a result, although tobacco users pay more, the government does not receive any additional revenue from the increased price, but the profits of the traders increase.

Among others present were Professor Dr. Rafiqul Islam from the Sociology Department of Jagannath University, Dr. Iftekhar Muhsin, Project Coordinator at the Shastho Shurokkha Foundation, along with high-ranking officials from various government and non-governmental organizations, representatives from domestic and foreign development partner organizations, and media personnel. - Press Release