Prices for budget-tier cigarettes are set to rise once again across the country following approval from the Cabinet to increase the minimum retail price for a pack of ten sticks from 62 taka to 65 taka. The decision came during the 20th Cabinet meeting of the fiscal year, held on Monday, 7 September, at the National Parliament Building in Dhaka.
The fresh revision imposes an additional 3 taka increase on entry-level cigarettes, coming shortly after initial price adjustments introduced in the 2026–27 national budget. Under the budget announced earlier this year, the lowest-tier ten-stick pack had risen from 60 taka to 62 taka. According to an official press release issued after the meeting, the latest adjustment aligns with the provisions of the Value Added Tax and Supplementary Duty Act, 2012. To execute the changes, the Cabinet approved proposals to amend two previously issued gazette notifications concerning cigarette price structure alongside the administration of tax security stamps and banderoles.
Government officials emphasized that the price restructuring serves two core purposes: reining in the illicit trade of cheap, low-grade tobacco products and recovering revenue shortfalls within the tobacco tax collection framework. Raising the baseline price reduces market distortions at the lower end while strengthening state oversight over tax administration.
Pricing across mid-tier, high-tier, and premium cigarette segments remains unchanged under the new decision. Middle-tier brands remain fixed at 92 taka for ten sticks, high-tier options stay at 160 taka, and premium-tier offerings remain at 210 taka and above.
In a separate significant policy measure, the Cabinet cleared a extensive tax and duty waiver package aimed at boosting the renewable energy sector. Under the approved proposal, machinery and equipment imported specifically for solar power generation will enjoy comprehensive tax relief for a period of 180 days, starting from the issuance of the official government order.
During this six-month window, customs duty on eligible solar equipment will be capped at a maximum of 1 per cent. Importers will be fully exempt from regulatory duty, supplementary duty, value-added tax (VAT), advance tax, and advance income tax on qualifying shipments cleared through customs within the stipulated timeframe. The government anticipates that this temporary tax relief will lower capital expenditure for green energy developments, accelerating clean energy infrastructure across the country.
The Cabinet also approved a draft bilateral agreement with Hong Kong focused on the promotion and protection of foreign investment. Designed for an initial term of ten years, the pact aims to attract direct foreign investment from Hong Kong, driving domestic industrial development and creating employment opportunities.
Monday’s Cabinet decisions reflect a multi-pronged policy focus—combining stricter fiscal controls and revenue enhancement in the tobacco sector with aggressive tax incentives for green energy adoption and broader international investment outreach.
