In a strategic bid to safeguard the youth from the detrimental effects of nicotine consumption, mitigate premature mortality rates, and bolster national fiscal reserves, two prominent anti-tobacco organisations have jointly proposed a significant escalation in the retail price of cigarettes. The comprehensive proposal suggests a revised pricing structure where the cost per stick would range from a minimum of 17 Taka to a maximum of 35 Taka.
This fiscal and public health recommendation was formally presented during a press conference held at the National Press Club on Monday, 11 May. The event was organised through the collaborative efforts of the National Heart Foundation and the United Forum Against Tobacco. The organisations asserted that the current pricing of tobacco products in Bangladesh remains insufficiently prohibitive, thereby facilitating continued access for younger demographics and low-income populations.
The Proposed Four-Tier Pricing Structure
The proposal outlines a sophisticated restructuring of the cigarette market by categorising products into four distinct price brackets: Premium, High, Medium, and Low. Each tier is subject to a specific retail price adjustment complemented by a proposed 67 per cent ad valorem excise duty and a fixed 4 Taka specific tax per packet of ten sticks.
Premium Tier: The organisations have proposed a retail price of 200 Taka per packet of ten sticks. When incorporating the 67 per cent excise duty and the specific tax, the final consumer price per cigarette would reach 35 Taka.
High Tier: For this category, the proposal suggests increasing the packet price by 10 Taka, bringing it to 150 Taka. Under the proposed tax framework, this would result in a per-stick cost of 25.45 Taka, marking an increase of approximately 2 Taka from existing market rates.
Medium and Low Tiers: In a significant move to eliminate the availability of “budget” tobacco, the proposal advocates for merging the pricing of these two tiers. Currently priced at 80 Taka and 60 Taka respectively, the new recommendation seeks to set the price for both at 100 Taka per ten-stick packet. Applying the stipulated excise and specific taxes, the retail price per cigarette in these categories would be standardised at 17.01 Taka.
Public Health Implications and Economic Objectives
During the conference, esteemed health experts and tobacco control advocates emphasised that price elasticity remains the most effective tool in reducing tobacco prevalence. By significantly increasing the cost of entry, experts believe that hundreds of thousands of young people will be discouraged from initiating the habit, while current smokers may be incentivised to cease consumption due to financial constraints.
The medical rationale behind the proposal is grounded in the high burden of non-communicable diseases (NCDs) in Bangladesh. Experts warned that tobacco use is the primary driver of various malignancies, cardiovascular diseases, and chronic respiratory conditions. They noted that the long-term economic cost of treating tobacco-related illnesses far outweighs the short-term profits of the tobacco industry.
Furthermore, the National Heart Foundation pointed out that the proposed tax hike would lead to a substantial increase in government revenue. By transitioning towards a specific tax system rather than relying solely on ad valorem taxes, the government can ensure a more predictable and higher collection of revenue while simultaneously addressing a critical public health crisis.
The Current Context of Tobacco Control
Bangladesh has committed to becoming a “Tobacco-Free Country” by 2040, a vision articulated by the government to align with the Sustainable Development Goals (SDGs). However, anti-tobacco advocates argue that without rigorous tax reforms and the elimination of low-tier cigarette options, this goal remains elusive. The current proposal serves as a formal call to the Ministry of Finance and the National Board of Revenue (NBR) to incorporate these recommendations into the upcoming national budget.
The United Forum Against Tobacco underscored that while nominal prices have risen in recent years, cigarettes have actually become more affordable when adjusted for the rising per capita income and inflation in Bangladesh. This proposal seeks to rectify that disparity, ensuring that tobacco prices outpace economic growth to effectively curb consumption. The organisations concluded by urging the government to prioritise the health of the citizenry over the lobbying efforts of multinational tobacco corporations.