A roundtable hosted by the Policy Research Institute in Dhaka urged Bangladesh to adopt a simpler, more predictable tobacco tax framework, arguing that sharp duty and price hikes in June 2024 and January 2025 have reduced cigarette sales and weakened revenue performance. Speakers cited an Ernst & Young market assessment showing that despite repeated tax increases since FY20, revenue growth has lagged expectations as the total tax burden on tobacco has climbed to roughly 83%, among the highest globally.
Participants said frequent price adjustments and a complex multi-tier tax structure are distorting the market, pushing consumers toward cheaper segments and widening price gaps between tiers while creating incentives for illicit trade. The group recommended a gradual shift from a value-based to a specific tax system, stronger enforcement capacity to curb illegal trade, and improved factory-level monitoring, arguing that a transparent, stable tax policy is needed to sustain revenue, support administrative efficiency, and reduce market volatility.