Price hike of low-tier cigarettes to contribute in revenue growth, health safety

 
Cigarette is the major domestic revenue generating source of Bangladesh as it accounts for 10 percent revenue of the government in every fiscal. In last fiscal year, the government collected Tk 29,500 crore as domestic revenue from this sector. Out of four segments of cigarettes in the market, Low-tier cigarette accounts for almost 75 percent of sales in Bangladesh as it also poses huge public health danger.

Despite the large volume of sales, the revenue collection from low segment is insufficient since the base price of low tier cigarette is very minimal than that of cigarettes from other tiers, said economists and anti-tobacco campaigners.

They advocate for increasing the price of low-tier cigarettes, which would ultimately contribute in boosting economy and improving public health safety.
Anti-tobacco organization Progotir Jonno Gyan (PROGGA) and Anti-Tobacco Media Alliance (ATMA), in a recent press conference, advocated for increasing price for low-tier cigarettes to help low-income people to quit smoking since they are the lion share consumers of this lowe tier cigarette.

A joint study of ARK Foundation of Bangladesh and Tobacconomics of University of Illinois, Chicago showed that smoking among low-income people drops by 9 percent if price of cigarettes get increased by 10 percent.

Government, however, did not increase price of low-tier cigarette to major extent in last few years. Price of 10 sticks of low-tier cigarettes has only increased by Tk 3 in last 4 fiscal years. Price of 10 sticks of low-tier cigarette was Tk 37 in 2019-2020 fiscal while the price of the same has reached at Tk 40 in 2022-2023 fiscal.

Bangladesh continues to remain highly dependent on cigarette and tobacco products for revenues as the sector had been experiencing 10-15 percent growth in every fiscal. The growth, however, has dropped in recent time.Data from the National Board of Revenue (NBR) showed that Tk 28,500 crore came in the form of value added tax and supplementary duty (SD) on cigarettes in fiscal 2020-21, that amounted 13 percent growth.