Killing Us Softly

Tobacco taxation in Bangladesh follows ad valorem method, in which the amount of tax is proportional to the price per unit of tobacco. Because the prices of tobacco products in Bangladesh are generally low, the impact of tobacco tax on the retail prices has not been very high. Consequently, tobacco consumption has actually become more affordable despite increase in the retail price as income growth during the period outpaced the growth in tobacco price. Over the last decade, the price of high and medium-tier cigarettes went up and their market share drastically went down. But as the price of low-tier cigarettes remained low, so the lost market share of high and medium-tier cigarettes was completely replaced by lower-tier ones.