Bangladesh could forgo more than Tk 4,000 crore ($328 million) in annual tobacco tax revenue in fiscal year 2026-27 because cigarette prices set in the proposed budget do not reflect actual retail market prices, according to the Power and Participation Research Center (PPRC). The think tank estimates that the government will lose approximately Tk 4,062 crore ($333 million) in revenue because low- and medium-tier cigarettes are sold at prices higher than the official minimum retail prices used for tax calculations.
Under the proposed budget, the minimum retail price is set at Tk 62 ($0.50) per 10 sticks for low-tier cigarettes and Tk 92 ($0.75) for medium-tier products, while retailers commonly sell individual sticks at prices that translate to pack values of Tk 70 and Tk 100 ($0.57 and $0.81), respectively. Based on sales of 6,118 crore low- and medium-tier cigarette sticks in FY25, PPRC argues that the untaxed gap between official and actual prices represents a significant missed revenue opportunity.
The organization said total tobacco tax collections have continued to rise, reaching about Tk 45,000 crore ($3.7 billion) in FY26, but contended that a substantial portion of price increases is being retained by tobacco companies rather than captured by the government through taxation. PPRC called for tobacco tax policies that better reflect market realities to strengthen revenue collection and public health outcomes.