Bangladesh Tobacco – Time to Move Beyond Traditional Tax Stamps

Despite the continuing high prevalence of tobacco consumption in Bangladesh, the country has demonstrated strong policy intent, being among the earliest signatories to the World Health Organisation Framework Convention on Tobacco Control (WHO FCTC), and with a commitment to achieving tobacco-free status by 2040. While several initiatives have been undertaken to increase tobacco taxes, the desired fiscal and public health outcomes have yet to be fully realised, largely due to structural and enforcement limitations.

Bangladesh’s tobacco taxation framework is based on a multi-tiered ad valorem excise system, applied across cigarettes, bidis, and smokeless tobacco products. Although this system generates substantial revenue, it remains complex and administratively challenging, enabling price manipulation, under-declaration, and product shifting across tiers.

To support enforcement, Bangladesh introduced a tax stamp (banderole) system in 2002, requiring all duty-paid tobacco products to carry physical stamps.

According to the World Bank (2018), this system contributed to maintaining a relatively low illicit cigarette market share, estimated at 2-4%, compared to global averages.