The Bangladesh tax system and income rises have made smoking more affordable
A Union economic report launched in Bangladesh on 17 May 2012 shows that tobacco use in the country continues to increase, due in large part to a taxation system that has allowed real prices of tobacco products to drop steadily over recent years. Simultaneous increases in income mean that tobacco is increasingly affordable.
The Economics of Tobacco and Tobacco Taxation in Bangladesh estimates that 57,000 deaths are attributed to tobacco use each year, about one in six of all deaths among Bangladeshis 30 years and older. In addition, tobacco-related illness and lost productivity equate to approximately 110 billion taka (US$1.3 billion) each year, the equivalent of 3% of GDP.
The report advises that increasing taxation on all cigarette brands to a specific tax rate of 34 taka (42 US cents) per 10 sticks (70% of retail price) could lead nearly 7 million current smokers to quit and prevent 7 million youth from beginning to smoke. In turn, these measures would prevent 6 million premature deaths and raise additional excise revenues of 15.1 billion taka (US$ 200 million).
Bangladesh also faces a problem of very cheap bidis, which are thin, hand-rolled, locally-produced cigarettes. The report suggests that taxing all bidis at a specific tax rate of 4.95 taka (6 US cents) per 25 sticks (40% of retail price) could lead 3.4 million adult bidi smokers to quit and prevent 3.5 million youth from taking up the habit. In turn, this would prevent 2.5 million premature deaths and raise additional excise revenues of 7.2 billion taka (US$ 87.5 million).
This report is one of a series of reports on tobacco taxation produced by The International Union Against Tuberculosis and Lung Disease and funded by the Bloomberg Initiative to Reduce Tobacco Use. Similar reports are available on China, Egypt, India, Indonesia, Mexico, Poland, Russia, Turkey, Ukraine, and Vietnam. An overview of the issue in all 15 Bloomberg Initiative priority countries is also available at http://www.tobaccofreeunion.org/content/en/217/
Download the Bangladesh report