Stakeholders expressed apprehension that the sudden hike in VAT and SD would spur consumer prices, dampen demand and ultimately affect the government revenue.
As cigarette manufacturers release their products to the market after paying the revised taxes and duties, almost all types of cigarettes now cost an additional Tk 1-2 per stick.
The National Board of Revenue (NBR) has already issued directives for using stamps and banderoles based on the new price levels.
Dwelling on the matter, Shabab Ahmed Choudhury, head of corporate and regulatory affairs, BAT Bangladesh, stated, 鈥楥igarette tax in Bangladesh already exceeds the level recommended by WHO (75pc) and this decision to raise it to 83 per cent raises significant concerns for the industry鈥檚 long-term future. This change will result in series of unintended consequences 鈥� impacting the business footprint and investment, the illicit cigarette market, and the Government revenue long term.聽 Moreover, the decision will negatively affect the livelihoods of approximately 4.4 million citizens connected to the extensive supply chain reliant on the tobacco industry and its associated sectors, including farmers, retailers, and distributors.鈥�
In the fiscal year 2023鈥�24, the government earned Tk聽37,915 crore in taxes and duties from the sector. This amount was paid by 31 companies selling cigarettes. In the previous fiscal year, the VAT department collected Tk 32,816 crore in taxes and duties from cigarette sales.聽 鈥� Press release