Tobacco prices set to rise under proposed FY2025–26 budget

The prices of cigarettes, chewing tobacco (zarda), and gul are expected to increase, as the interim government's proposed national budget for FY2025–26 includes new and increased duties on tobacco-related imports.
Finance Adviser Dr. Salehuddin Ahmed announced the proposed budget, totaling Tk 7,90,000 crore, during a nationwide broadcast on Monday (June 2). 
Among the key measures, the budget aims to discourage tobacco use and production due to its harmful impact on public health.
Currently, tobacco seeds are imported duty-free, a policy the Finance Adviser labeled inconsistent with public health priorities. To discourage tobacco cultivation, the government plans to introduce a new Harmonized System (HS) code specifically for tobacco seeds and impose a 25% customs duty on their import.
An investigation committee formed to look into tax evasion in the tobacco industry has submitted a report recommending stricter import regulations on raw materials used in cigarette manufacturing. Based on the findings, the government has proposed tripling the existing duty rates on these inputs for manufacturers.
Specifically, the budget proposes a 100% supplementary duty on the import of paper used in cigarette production by manufacturers. For commercial importers, the rate may rise as high as 350%.
Additionally, while key inputs like acetate tow and acetate filter rods currently enjoy zero supplementary duty, the government may revisit this exemption in the future as part of broader efforts to tighten control over tobacco product manufacturing.
These measures signal a tougher stance by the interim government on the tobacco industry, aligning fiscal policy with public health goals.