ATMA demands merging cigarette price tiers to three categories

The price difference between low and medium grade cigarettes is too low, the anti-tobacco group says

The existing four tier pricing system cigarettes has rendered the tobacco price and tax measures less effective and should be reduced to three to safeguard public health, the Anti-Tobacco Media Alliance (ATMA) says.

Categorised into low, medium, high, and premium tiers, the narrow price difference between low and medium grade cigarettes allows consumers to choose brands belonging to any of these two tiers, ATMA said in a meeting with the National Board of Revenue (NBR) on Tuesday.

This loophole can be plugged by merging the low and medium price tiers, according to an ATMA statement released following the FY 2025-26 pre-budget meeting with the NBR.

During the meeting, the NBR Chairman Md Abdur Rahman Khan said he would consider reducing the number of cigarette price tiers to three while simultaneously increasing the prices.

He also appreciated PROGGA - Knowledge for Progress - and ATMA’s proposal that suggests generating Tk 200 billion in additional revenue through reforms in the tobacco tax structure.

ATMA observed that prices of tobacco products in Bangladesh are considerably low.

An analysis of the average retail prices of essential commodities, as reported by the Department of Agricultural Marketing (DAM), in seven metropolitan cities of the country (Dhaka, Chattogram, Rajshahi, Khulna, Sylhet, Barishal and Rangpur) between Jul 4, 2021 and Jul 4, 2023 shows that the price of loose sugar has seen a 89 percent hike in this time period, 87 percent for potatoes, 75 percent for loose flour, 47 percent for freshwater cafish, 43 percent for eggs, 34 percent for soyabean oil, 30 percent for powdered milk, and 27 percent for broiler chicken, it added.

However, during this period, the hike in the prices of different tiers of cigarettes ranged between 6-15 percent only. Such growing affordability is particularly alluring for the youth and the poor which is undoubtedly an ominous sign for our public health, ATMA said.

The proposals raised by ATMA for the FY 2025-26 say the low and medium tier should be merged into one and prices for 10 sticks of the merged tier should be set at Tk 90.

The proposal, if realised, will encourage the low-income smokers to quit and discourage the youth from lighting up.

In addition, ATMA urged policymakers to keep the retail price of high-tier cigarettes at Tk 140 for 10 sticks and to raise the prices for 10 sticks of premium cigarettes to Tk 190. The supplementary duty on all cigarette tiers should stay 67 percent, it added.

As per the proposal presented by ATMA, for non-filtered bidi, the retail price should be Tk 25 for 25 sticks, and for filtered bidi, the retail price for 20 sticks should be set at Tk 20. Both prices should be followed by a 45 percent supplementary duty.

Regarding smokeless tobacco, the retail price for 10 grams of Jarda and Gul should be Tk 55 and Tk 30, followed by a 60 percent supplementary duty. The budget proposals also suggest retaining 15 percent VAT on the retail prices of tobacco products and continuing the existing 1 percent health development surcharge (HDS).

In support of its demand, the ATMA informed that budget proposals placed by anti-tobacco organisations, if realised, can help the government raise a staggering Tk 200 billion in additional revenue, which will be useful in reaching targets and improving public health, the statement reads.

Implementation of such proposals, in the long run, will also help prevent the premature deaths of 1.7 million Bangladeshis, including nearly 900,000 youths.

It should be noted that 37.8 million adults in Bangladesh use tobacco products (smoked and smokeless). Tobacco claims 161,000 lives every year in Bangladesh. In 2017-18, the toll of tobacco use in the national economy (due to medical expenses and loss of productivity) stood at Tk 305.6 billion.