Raising Tobacco Taxes in FY 2023-2024: A Crucial Step Towards a Tobacco-Free Bangladesh by 2040

This technical note discusses the economic reasoning behind the proposal to introduce a tiered specific excise tax with uniform burden of 65% and increase the minimum price across all brands in FY 2023-2024 in Bangladesh, as presented in a fact sheet developed by tobacco control partners from Institute of Health Economics, Campaign for Tobacco-Free Kids, The Union, Vital Strategies, the World Health Organization, and Tobacconomics. The proposal was identified to reinforce recent positive trends in cigarette tax policy and administration, while helping to recover losses endured during the pandemic. This change would increase tobacco tax revenues, reinforce the tax system by further reducing tax avoidance opportunities and help to recover the potential losses in tax revenue due to the recent inflation and economic slowdown. Further, the proposal is less ambitious than a proposal that would fully recover FY 2018/19 prices in real terms, making it unlikely that people will switch to bidi or other cheaper options as affordability will remain steady. The technical note concludes with recommendations to advance economic development, improve population health, and align tobacco tax policy in Bangladesh with global best practices.