In the face of shifting economic conditions and evolving regulatory frameworks, BAT Bangladesh continues to steer through a complex and competitive business environment, demonstrating adaptability and resilience. In this exclusive interview, Monisha Abraham, the Managing Director of BAT Bangladesh, discusses the industry’s current challenges, the company’s contribution to the national economy, and the strategic priorities essential for ensuring long-term sustainability- for the business and government revenue.
Question 1: Bangladesh’s business landscape is rapidly evolving, creating new opportunities and unique challenges for industries nationwide. As the Managing Director of BAT Bangladesh for over a year now, how do you see the evolving circumstances impacting the tobacco industry?
Answer: Bangladesh has long been a promising destination for investment and business, underpinned by a resilient economy and a growing consumer base. Over the years, industries have thrived here, contributing significantly to employment and national revenue. That said, the Country has been navigating through a period of significant economic transformation, shaped by foreign exchange constraints, inflation, and shifting policy dynamics. These shifts have created headwinds for all industries, including tobacco.
Barring covid, revenue growth from the tobacco industry was in the range of 12-16%, however in FY 2024-25, this dropped to around 5%. This signals a notable shift and underscores the need for a more stable and predictable fiscal environment.
While recent abrupt duty and VAT hikes have added pressure, the more pressing issue is the absence of a long-term fiscal roadmap. As a major contributor to government revenue, the industry requires a balanced approach. Instead of increasing the tax burden on the already high taxed sectors, the focus should be on broadening the tax base, simplifying structures, and linking price adjustments to macroeconomic indicators like inflation and income growth.
High tax combined with above inflationary back-to-back pricing within just 6 months has fueled the growth of illicit cigarette market eroding both public health goals and government revenues. That is the reason we continue to advocate for a pragmatic, evidence-based tax framework that safeguards government revenue while ensuring fair conditions for legitimate businesses.
I believe that a long-term road map combined with fiscal predictability, transparency, and collaborative policymaking are key to ensuring sustainable growth for our industry and the wider economy.
Question 2: How do you view BAT Bangladesh’s role in the national economy?
Answer: With a legacy spanning over 115 years, BAT Bangladesh has played an important role in the country’s economic journey as a trusted development partner. As one of the top taxpayers, we contribute nearly 8% of the government’s internal revenue. We are also the only publicly listed tobacco company in Bangladesh, with the third-highest market capitalization in the country’s stock market. In 2024, as a proud exporter, we shipped tobacco leaves worth USD ~70 mil to over 20 countries, boosting foreign exchange earnings and enhancing Bangladesh’s global trade footprint. Our value chain, which consists of around 1.6 million livelihoods, including workers, farmers, distributors, retailers, and service providers, is deeply integrated into the national economy, creating employment, supporting rural communities, and enabling inclusive growth across multiple sectors.
Beyond our economic impact, we take pride in being a talent incubator. Many of today’s prominent corporate leaders in Bangladesh began their careers at BAT, where they gained early exposure to international standards, strategic thinking, and operational excellence.
I am proud to lead an organization that has long embraced sustainability as a core part of how we do business. We run the country’s largest private-sector-led afforestation programme and a clean drinking water initiative that supports underserved communities. These efforts have not only created meaningful community impact but have also been acknowledged and recognized nationally and internationally. Additionally, BAT Bangladesh is the only company in the country to be certified under the Alliance for Water Stewardship (AWS) Standard - an achievement that reflects our commitment to responsible water management and global best practices.
Question 3: Revenue growth from tobacco industry declined in the recently concluded fiscal year. What are the key reasons behind this, and what steps should be taken to address it?
Answer: First and foremost, the abrupt increase in total tax incidence, from 77% to 83% in the January 2025 combined with back-to-back above inflationary pricing within the space of just 6 months. This has been triggered mostly due to the absence of a long-term, predictable fiscal roadmap for the industry. Frequent and abrupt price and tax changes create uncertainty, disrupt market dynamics, and make it difficult for businesses to plan and invest sustainably. What is important for effective policy making is open dialogue with industry stakeholders. While such engagement was largely absent previously, we are now witnessing the beginning of meaningful conversations. However, it is crucial that these dialogues are translated into tangible actions and outcomes that are beneficial to the industry and consequently the country.
An overly aggressive tax structure is unintentionally shifting consumers toward cheaper, unregulated products. As a result, the illicit cigarette market is expanding rapidly. According to media reports, the government lost nearly BDT 3,784 crore in FY 2023–24 alone due to tax evasion by illegal operators.
Historically, the tobacco sector has contributed strong double-digit revenue growth to the national exchequer. This year’s slowdown highlights the need for a more balanced approach, one that aligns fiscal goals with the industry’s long-term sustainability. A clear and consistent excise policy, developed through inclusive dialogues with stakeholders, can help ensure sustainable revenue while supporting a resilient legal industry.
Question 4: What’s the latest on BAT Bangladesh’s office relocation, and how is it impacting the company’s operations and government revenue?
Answer: BAT Bangladesh had been operating in Mohakhali DOHS under a 90-year lease agreement with the Cantonment Board since 1964, with provisions for extension every 30 years. Since the cantonment board did not extend the lease, BAT Bangladesh instituted legal proceedings to have it extended, as per contract. However, the outcome was unsuccessful, and we have now vacated the Mohakhali premises in coordination with the Bangladesh Army and Cantonment Board. I am incredibly proud of the team for executing this large-scale relocation in such a short time with speed, discipline, and care.
In line with our responsible business practices, we’ve taken proactive steps to support all impacted individuals, including third-party workers engaged through service contractors.
We’ve already started operating from a new interim Head Office in Tejgaon, Dhaka. Preparations are also underway for a smooth transition to a permanent office. Besides, as part of our long-term sustainability strategy, we anticipated future infrastructure needs and invested significantly in our Savar factory. Over the years, it has been progressively developed to support ongoing operations and future growth. Most recently, we approved an investment of approximately BDT 297 crore to enhance manufacturing capacity at Savar following the Dhaka factory’s closure.
Given the scale of our operations and the nature of this transition, some challenges may arise that could have implications on government revenue. We are taking all necessary measures to manage the situation responsibly and minimise any potential disruption. At the same time, this experience underscores the value of a predictable and enabling business environment. Ensuring clarity in regulatory matters and upholding legal processes are important - not just for existing investors like us, but also to foster long-term confidence among prospective investors in Bangladesh.
Question 5: BAT Bangladesh is renowned for building future leaders. What initiatives are in place to develop talent and prepare the next generation of leadership?
Answer: We are incredibly proud of how talent from Bangladesh continues to shine on the global stage. BAT Bangladesh has long served as a talent incubator, not only for our own organization but also for diverse industries. Many of our alumni now serve as C-suite leaders and senior professionals across multiple sectors.
Within the BAT Group itself, more than 50 Bangladeshi managers are currently contributing to markets around the world, from Asia-Pacific to Europe and beyond. Apart from our management, we take immense pride in our factory workforce, who have strengthened Bangladesh’s global reputation by travelling to countries such as Brazil, Singapore, Poland, and Nigeria to provide training and support to local teams.
With over 700 managers currently shaping their professional journeys within the organisation, our comprehensive HR practices and commitment to people development have earned us recognition as a Top Employer. By playing a vital role in driving the company’s growth and long- term success, these future leaders are empowered by globally aligned leadership frameworks that help unlock their full potential. Performance at BAT is measured through a balanced scorecard, where business outcomes are weighed alongside leadership behaviors. We particularly value qualities like empathy, inspiration, and the ability to lead diverse teams with authenticity and impact.
What excites me most is the caliber of local talent in Bangladesh. I’ve seen remarkable passion, purpose, and a deep sense of responsibility among our people, traits that not only drive our business forward but also position them to lead in any challenging environment.
Question 6: What steps do you believe are necessary to ensure the long-term sustainability of the government revenue from the tobacco sector?
Answer: The tobacco sector has historically contributed significantly to national revenue, exports, employment, and livelihood upliftment. Disruptions, without viable alternatives, can undermine this ecosystem and have broad economic consequences.
A predictable, multi-year fiscal roadmap is essential to support this stability. Sudden or overly aggressive tax hikes often lead to market distortions and discourage compliance. A simplified, inclusive fiscal framework - developed through meaningful dialogue with all relevant stakeholders - can enhance revenue certainty, reduce tax evasion, and promote a level playing field for all players. It is equally important that businesses are consulted prior to the formulation of any significant fiscal or regulatory decisions, ensuring policies are pragmatic and implementable. In addition, stricter anti-illicit policies and stronger ground level enforcements are also essential to tackle the growing illicit market and ensure fair competition.
Beyond taxation, sustainable regulatory policy must balance public health goals with economic realities. The upcoming amendments to the Smoking and Usage of Tobacco Products (Control) Act, 2005 should be practical, enforceable, and suited to Bangladesh’s socio-economic context. Overly rigid measures may impact the vast supply chain and reduce the government's ability to generate consistent revenue.
The tobacco industry is one of the oldest operating sectors in Bangladesh with a vast supply chain impacting livelihood of nearly 5 million people. While the sector is already leading in terms of innovation in logistics, there is scope of greater innovation, digitization and modernization which would lead to greater efficiency and most importantly, transparency which in turn would help to safeguard the revenue generation from this sector.
We sincerely appreciate the continued support and collaboration of our stakeholders and remain committed to working together to ensure the long-term sustainability of this important sector. At BAT Bangladesh, we remain focused on delivering long-term value through fostering quality growth, a sustainable future, and a dynamic business model, while working closely with the government to help build a better tomorrow.