Effective taxation on cigarette suggested

Recently, retail prices of all cigarettes have been increased and supplementary duties on all tiers of cigarettes have also been raised to 67 percent. This will reduce smoking prevalence and secure additional revenue for the government. However, further benefits could have been ensured if these measures were taken at the beginning of the fiscal year.

Speakers said so on Monday at a press conference on cigarette taxation in the next fiscal year. The session was organized by non-government think tank Unnayan Shamannay at the Zahur Hossain Chowdhury Hall of the National Press Club.

Dr. Shafiun Nahin Shimul (Professor, Health Economics Institute, Dhaka University), Dr. Suzana Karim (Associate Professor, Health Economics Institute, Dhaka University), and Dr. Nazmul Islam (Associate Professor, BUET) were present as Expert Discussants.

Kamruzzaman Babu (Special Correspondent, News 24), and two former National Footballers- Kaiser Hamid and Sheikh Mohammad Aslam were present as civil society representatives, said a press release.

While presenting the keynote paper Unnayan Shamannay's Research Director- Abdullah Nadvi pointed out that the government has been losing BDT 66 billion annually because of not ensuring effective cigarette taxation. As a result of the recent initiative for effective cigarette taxation in the middle of ongoing fiscal year- the government is likely to get around BDT 50 billion of additional tax from cigarette sales. Had these measures been taken at the beginning of the year- another additional BDT 20 billion could have been added.

Instead of focusing on collecting additional taxes from cigarette taxes, the policymakers ought to emphasize safeguarding the youth from the harms of cigarettes, opined both Kaiser Hamid and Sheikh Aslam. Dr. Shimul pointed out that in January 2025, for the first time, supplementary duty rate on low-tier cigarettes have been raised to the level of that on other higher-tier cigarettes (67 percent). As the youth usually consumes the low-tier cigarettes, rising taxes on these cigarettes must be considered as a welcome move. Dr. Nazmul opined that through ensuring effective cigarette taxation in FY2025-26, on the one hand- smoking prevalence can be reduced desirably, and on the other hand- tax collection from cigarette sales may be increased by 20 percent. Tiers of cigarettes should be reduced from four to three- urged Dr. Suzana Karim and she opined that if this is done then tax collection will become easier, and smoking prevalence will be reduced at the same time.
Unnayan Shamannay's Head of Program- Shaheen Ul Alam moderated the session.