When cigarette prices rise, smokers are expected to cut consumption or quit. That is the central public-health justification for increasing tobacco taxes. In Bangladesh, however, many smokers can respond in a much simpler way: They can switch to a cheaper brand.
A rapid survey conducted by PROGGA (Knowledge for Progress) in September 2026 shows how easily this can happen. The survey covered 80 cigarette retailers across all eight divisional cities and identified 53 brands being sold at 12 distinct price points.
Yet, officially, Bangladesh has only four cigarette price tiers: Low, medium, high, and premium.
This means that what appears to be a four-tier structure in government policy has become a 12-price-point market in practice. Such a wide range of prices gives smokers ample room to move down the price ladder when their preferred cigarettes become more expensive.
A major loophole in the low tier
The greatest price variation was found in the low tier, where cigarettes were available at eight different price points.
Under the current structure, the minimum retail prices for a pack of 10 cigarettes are Tk65 and above for the low tier, Tk92 and above for the medium tier, Tk160 and above for the high tier, and Tk210 and above for the premium tier.
The problem lies partly in the phrase “and above.”
If the low tier begins at Tk65 and the medium tier begins at Tk92, manufacturers can place low-tier cigarettes at several prices between Tk65 and Tk91. Indeed, the survey found a low-tier cigarette priced at Tk90, only Tk2 below the starting price of the medium tier.
Therefore, a smoker facing a price increase does not necessarily have to quit, reduce consumption or even move to another official tier. The smoker may simply switch to a slightly cheaper cigarette within the same tier.
This flexibility weakens the intended effect of tobacco taxation.
Cheap cigarettes remain widely available
Bangladesh already faces a major tobacco-use burden. According to the Global Adult Tobacco Survey 2017, 35.3% of adults used tobacco, while 18% smoked tobacco.
At the same time, cigarettes remain remarkably affordable. The WHO Report on the Global Tobacco Epidemic 2025 placed Bangladesh 163rd among 186 countries in terms of the price of the cheapest cigarette brand in 2024. In other words, Bangladesh remains among the countries where cheap cigarettes are most readily available.
The country also scored only 1.38 out of 5 in the fourth edition of the Cigarette Tax Scorecard, published in 2025. One reason for this poor performance is Bangladesh’s complex, multi-tiered ad valorem tax structure.
Under an ad valorem system, taxes are calculated as a percentage of the declared retail price. When numerous price points are available, cigarette companies can maintain cheaper brands and position products strategically across the market. Smokers who are sensitive to price can then switch brands rather than quit.
This is particularly concerning in a country where household incomes are limited and young people can access inexpensive cigarettes. The continued availability of very cheap brands undermines both public-health objectives and the effectiveness of tax increases.
Tax increases alone are not enough
Tobacco taxation is one of the most effective tools available for reducing tobacco consumption. But its effectiveness depends on more than the rate of tax.
The structure of the tax system matters just as much.
If taxes increase but cheaper alternatives remain widely available, many smokers will simply move down the price spectrum. This is known as down-trading. The more price points the market offers, the easier down-trading becomes.
The PROGGA survey provides a snapshot of how this mechanism operates in Bangladesh. With 53 brands spread across 12 price points, the cigarette market provides consumers with numerous alternatives at different levels of affordability.
As a result, a tax increase affecting one brand or price segment may not produce the expected reduction in cigarette consumption. It may merely redistribute smokers among brands.
A tax policy that raises the price of some cigarettes while leaving cheaper alternatives easily accessible cannot deliver its full public-health benefit.
Three reforms Bangladesh should pursue
The findings point to three urgent policy priorities.
First, the government should remove the phrase “and above” from cigarette price-tier definitions. As long as broad price ranges remain within each tier, manufacturers will be able to market cigarettes at multiple price points. Each tier should instead have a clearly specified retail price.
Second, Bangladesh should progressively reduce the number of cigarette price tiers, with the ultimate objective of introducing a single tier. A single price and tax tier would sharply reduce the opportunity to switch between cheaper and more expensive cigarettes.
Third, the country should move towards a simple, uniform specific excise tax. Under such a system, a fixed amount of tax would apply to each cigarette or pack, regardless of its retail price. The tax should be increased regularly so that cigarette prices rise faster than inflation and income growth.
This is essential because a nominal price increase does not automatically make cigarettes less affordable. If people’s incomes rise faster than cigarette prices, cigarettes may become more affordable over time, even after-tax increases.
Make all cigarettes less affordable
The objective of tobacco taxation should not be merely to make selected cigarette brands more expensive. It should be to make all cigarettes progressively less affordable and to leave consumers with fewer opportunities to avoid the intended impact of tax increases.
Bangladesh’s current system falls short of that objective.
Four official price tiers have produced at least 12 effective price points. The result is a market in which smokers can adjust their brand choices according to their ability to pay, instead of reducing consumption or quitting.
This is not simply a technical problem in tax administration. It is a public-health concern with consequences for families, healthcare expenditure and the country’s broader development.
Closing the price gaps, reducing the number of tiers and adopting a uniform specific tax would make the cigarette tax system simpler, more transparent and more effective. Most importantly, these reforms would help ensure that future tax increases lead to lower cigarette consumption rather than another round of brand switching.
ABM Zubair is Executive Director of PROGGA (Knowledge for Progress) and Director of the Centre for Research and Advocacy to Fight Tobacco (CRAFT), Bangladesh. Email: progga.bd@gmail.com.