Unrounded cigarette prices to cost govt Tk 4,000cr: PPRC

The government could lose an estimated Tk 4,000 crore in annual revenue in the upcoming fiscal year 2026-27 due to unrounded cigarette pricing, the Power and Participation Research Centre (PPRC) said yesterday.

The proposed budget for FY27 sets the minimum retail price for low-tier cigarettes at Tk 62 per 10 sticks and Tk 92 for medium-tier, said Mohammad Ihtesham Hassan, senior research associate at PPRC.

However, retailers sell low-tier cigarettes at Tk 7 per stick, making the effective pack price Tk 70, he added at a press conference on tobacco-related policies in the proposed budget, held at the Jatiya Press Club. For medium-tier, individual sticks are sold at Tk 10 each, pushing the actual pack price to Tk 100.

Based on 6,118 crore low- and medium-tier sticks sold in FY25, that untaxed gap translates to an estimated annual revenue loss of Tk 4,062 crore, Hassan said.

Low-tier cigarettes consistently generate the largest revenue share across all tiers. But after two consecutive tax-base increases in 2023 and 2025, both revenue and supply from this tier have fallen.

PPRC data show low-tier supply dropping from 6,890 crore sticks in FY24 to 4,100 crore in FY25, and further to 2,830 crore as of May this fiscal year. Revenue from the tier fell from Tk 22,890 crore in FY24 to Tk 15,320 crore over the same period.

Smokers have increasingly shifted to medium-tier cigarettes. That tier accounted for just 7 percent of all cigarettes sold in FY22, In FY26, its share has since risen to 42 percent as of May. Low-tier’s share fell from 77 percent to 49 percent during the same period.

Despite the volume decline, total tobacco revenue has risen each year -- from below Tk 30,000 crore in FY21 to around Tk 45,000 crore in FY26 with a month still remaining.

Anti-tobacco campaigners and economists at the event renewed calls for an outright ban on e-cigarettes and other emerging tobacco products, warning that their growing availability could fuel nicotine addiction, particularly among the youth.

Hassan said the BNP government has reversed a ban on emerging tobacco products such as e-cigarettes and nicotine pouches, and is instead pursuing taxation of these items. The budget proposes a 40 percent supplementary duty on nicotine pouches and 67 percent on heated tobacco products.

Hossain Zillur Rahman, executive chairman of PPRC, said some price adjustments in the proposed budget appear disconnected from market realities.

“When tax decisions become trapped in decimal-point calculations rather than reflecting actual market conditions, the policy impact remains limited and valuable revenue opportunities are lost,” he said.

Prof Shafiun N Shimul, director of the Institute of Health Economics, said Bangladesh has a large tobacco market with around 70 billion cigarette sticks sold annually, and that despite successive price hikes, smoking prevalence has not declined at the expected pace.

A significant share of price increases continues to be captured by tobacco companies rather than the government, he added.

SM Abdullah, associate professor at the University of Dhaka’s Department of Economics, said the proposed budget signals a shift from curative to preventive healthcare, but achieving that goal will require a stronger and more effective tobacco tax policy.

Prof Syed Akram Hussain, chairman of the Clinical Oncology Department at Bangladesh Medical University, said tobacco consumption is responsible for around 30 percent of cancer cases in the country and is linked to many other major non-communicable diseases, and called on the government to take stronger measures to curb tobacco use.

The PPRC welcomed the budget’s proposal to impose a 300 percent supplementary duty on acetate tow and filter rods -- two raw materials used in cigarette filter production that currently carry no supplementary duty -- and also cited the raising of the premium-tier minimum retail price to Tk 210 per 10 sticks as a step in the right direction.