How the cigarettes now cost after tax-duty hike

Cigarette prices have risen once again due to a hike in tax and customs duty. The tobacco companies have started marketing cigarettes under the revised tax and duty rates, while the retail price has risen by Tk 1 or 2 for all brands. 

In the midway to the fiscal year 2024-25, the authorities hiked value-added tax (VAT) and supplementary duty on over 100 goods and services. For cigarettes, both the price tiers and the supplementary duty went up. 

The National Board of Revenue (NBR) has already instructed to use stamps and bandrolls as per the price tiers, and the tobacco companies are paying taxes and duties accordingly. It eventually pulled up the retail prices.   

The price of Benson & Hedges has risen from Tk 18 to Tk 20 per stick, while a stick of Goldleaf now costs Tk 15, up from Tk 13. Lucky Strike cigarettes are now selling at Tk 12 per stick, rising from Tk 10, and the price of Star cigarettes rose to Tk 10 per stick. 

Apart from those, Derby, Pilot, and Hollywood are now selling at Tk 8 per stick, and Royals are priced at Tk 7, rising by Tk 1 per stick. 

A retailer in the capital’s Karwan Bazar area told Prothom Alo that they are buying the cigarettes at a higher rate as the tobacco companies hiked the prices. He, however, mentioned that the price hike had a little impact on the sale at the retail level. 

The tobacco companies adjusted the wholesale prices. A 20-stick packet of Benson & Hedges now costs Tk 370 at the wholesale level, while Goldleaf is selling at Tk 280 pe packet, Lucky Strike at Tk 210, Star at Tk 172, Pilot, Derby, and Hollywood at Tk 144, and Royals Tk 126. On average, the price of a 20-stick packet rose by Tk 20 to 30, irrespective of brands. 

According to the NBR notification, the price of low-tier 10-stick cigarette packets has been increased from Tk 50 to Tk 60 and above, while the supplementary duty rose from 60 per cent to 67 per cent.  

For medium-tier cigarettes, prices have gone up from Tk 70 to Tk 80 and above, with supplementary duty rising from 65.5 per cent to 67 per cent. The price of high-tigher 10-stick packets has been hiked from Tk 120 to Tk 140 and above, and the ultra-high-tier cigarette prices jumped from Tk 160 to Tk 185 and above, with the supplementary duty rising from 65.5 per cent to 67 per cent. 

Shabab Ahmed Choudhury, the head of corporate and regulatory affairs at BAT Bangladesh (BATB),  said, “We, as the country’s highest revenue-generating company, believe that the NBR should have consulted stakeholders formally before taking sudden policy decisions.” 

Citing a World Health Organization (WHO) recommendation, he noted that the tax on cigarettes should be 75 per cent, a threshold that has already been surpassed in Bangladesh. With the latest hike, the tax has now stood at 83 per cent.