The National Board of Revenue (NBR) is on the edge of taking what could become an unprecedented decision in the history of tobacco pricing policy in Bangladesh. British American Tobacco Bangladesh (BATB) has formally applied to the NBR seeking permission to reduce the retail prices of several cigarette brands. In a letter signed by BAT Bangladesh General Manager Kakhaber Benidze on July 16, the company requested the NBR to allow it to lower the prices of its cigarettes.

 

However, Section 3 of SRO No. 129-Law/2026/334, issued on June 7, 2026, clearly states that the maximum retail price (MRP) of any currently marketed cigarette brand cannot be reduced. BAT has therefore requested the NBR to amend the relevant provision to create an opportunity to lower the prices of its brands.

 

Public health experts believe that if the NBR accepts the proposal and allows cigarette prices to be reduced, it would not merely provide a business advantage to a single company. It could also create a historic and controversial precedent for Bangladesh's tobacco taxation, public health policy and revenue system.

 

According to sources, BAT has sought permission to reduce the prices of its Derby, Pilot and Hollywood brands from Tk 72 to Tk 63 per pack, while the price of Lucky Strike would be reduced from Tk 108 to Tk 92. Such reductions are currently not permitted under the existing regulations. The company has therefore requested an amendment to Section 3 of the General Order.

 

Policy analysts fear that allowing popular cigarette brands to be sold at lower prices could reduce government tax collection by around Tk 7.50 per pack and potentially put nearly Tk 3,500 crore in government revenue at risk. The government revises cigarette prices and tax structures every year with the objective of increasing revenue and discouraging tobacco consumption. Against this backdrop, allowing cigarette prices to be reduced could contradict the broader objectives of the country's tobacco tax policy.

 

An NBR official, speaking on condition of anonymity, said, “Should the government break a long-standing policy safeguard simply to facilitate the business strategy of a single company? In Bangladesh, cigarette prices and tax structures are revised every year through the national budget, taking into consideration the need to discourage smoking and increase government revenue. However, there has never been an instance of the government officially allowing an established cigarette brand to be sold at a lower price. If BAT’s application is approved, it would therefore be the first such instance in the history of Bangladesh’s tobacco taxation policy.”

 

The country was among the first to sign the World Health Organization's Framework Convention on Tobacco Control in 2003. Against this backdrop, public health experts warn that allowing established and popular cigarette brands to reduce their prices could conflict with the public health objectives.

 

If the NBR amends the existing provision and approves BAT's proposal, it would mark the first government-authorised reduction in the retail price of an established cigarette brand in Bangladesh. Anti-tobacco organizations fear that such a decision could have long-term consequences for public health, government revenue and the country's tax policy.

 

In its letter to the NBR, BAT argued that reducing cigarette prices would enable the company to sell an additional 800 crore sticks and generate Tk 3,400 crore in additional government revenue.

 

On the issue, Ibrahim Khalil, a tax analyst at the Bangladesh Network for Tobacco Tax Policy, said, “The state’s tax policy should not be changed based on the sales forecasts or market strategies of any particular company. If illicit cigarettes are the main concern, the solution should be stronger law enforcement, improved tax administration, and increased market monitoring. At the same time, the tax system should be digitised. But there is no justification for relaxing the tax structure or providing special opportunities to certain multinational companies without addressing these issues. No decision should be taken that could set a precedent for other industries to demand similar special policy benefits in the future.”

 

He further said that the illicit cigarette trade in Bangladesh is very limited. “Whatever illicit cigarette trade exists is largely made up of cigarettes produced domestically. The government has the capacity to stop this as well, if it wants to,” he said.

 

The economist also cautioned that reducing cigarette prices may not necessarily shrink the illicit cigarette market. Instead, it could trigger widespread "downtrading" within the legal cigarette market, with consumers shifting towards lower-priced products.

 

As a result, although the total volume of legal cigarette sales may increase to some extent, a significant portion of sales could move to lower tax tiers, potentially reducing the government's overall tax revenue. Therefore, the government should not accept the assumption that all of the proposed additional 800 crore sticks would necessarily come from the illicit market, the economist said.

 

According to research by the Bangladesh Anti-Tobacco Alliance (BATA), more than 161,000 people die every year in Bangladesh from tobacco-related diseases. Around 37.8 million adults currently use tobacco products, while another 38.4 million adults are exposed to second-hand smoke. Against this backdrop, the government has taken major tax measures on tobacco and tobacco products in the national budget for fiscal year 2026-27, aiming to strike the "best possible balance" between revenue generation and public health protection.

 

Anti-tobacco organisations say that higher cigarette prices could not only reduce smoking but also generate an additional Tk 44,000 crore in government revenue. In the long term, they estimate that nearly 400,000 premature deaths could be prevented. They also estimate that around 500,000 adults could be encouraged to quit smoking, while more than 372,000 young people could be prevented from taking up smoking.

 

Against this backdrop, BAT's request to reduce the prices of established cigarette brands is being viewed by stakeholders as a rare and significant development, particularly as the government is simultaneously pursuing a policy of increasing tobacco prices. The next move now rests with the NBR. Its decision will determine whether Bangladesh's long-standing tobacco pricing and taxation policy enters a new and potentially controversial chapter.