The Economics of Tobacco and Tobacco Taxation in Bangladesh

In this report, we briefly describe the tobacco environment in Bangladesh, beginning with a discussion of tobacco use and its health and economic consequences, followed by a short review of the supply of tobacco and tobacco products. Given available data, most of the discussion focuses on smoked tobacco products, particularly manufactured cigarettes and bidis. We then provide a short description of tobacco control policies in Bangladesh, followed by a more detailed discussion of tobacco taxes and prices. Existing evidence on the effects of prices on tobacco use is presented and this evidence is used to estimate the impact of alternative tax increases on consumption, excise tax revenues, tobacco use prevalence, and future deaths from tobacco use among those in the current population cohort. The report concludes with recommendations for future tobacco tax policy in Bangladesh.