ঢাকাবৃহস্পতিবার , ৬ অগাস্ট ২০২৬
In the high-stakes world of fiscal policy, the smoke from a cigarette often blinds policymakers to a far more pervasive threat. While the fight against combustible tobacco dominates headlines, a silent epidemic continues to fuel a health and economic crisis across Bangladesh.
Smokeless Tobacco (SLT)—comprising products like Zarda, Gul, and Sada Pata—is not just a cultural staple; it is a regulatory “ghost.” While smoking prevalence stands at 23.5%, SLT use is even higher at 27.5%, making it the dominant form of tobacco consumption in the country. Despite this, SLT remains persistently sidelined in taxation and national budget discussions.
This neglect is not accidental—it is deeply rooted in history. For decades, SLT products were classified as cottage industries, operating informally and largely outside the tax net. It was only in FY 2003–04 that Bangladesh first brought SLT under taxation after removing this classification. However, this delayed inclusion has left behind weak regulation, fragmented oversight, and limited policy attention.
The consequences are severe. Today, more than 22 million adults use SLT regularly. Unlike smoking, which is largely male-dominated, SLT use is nearly gender-neutral and disproportionately affects women and low-income populations. Its cultural acceptance—as a digestive aid, a social custom, or even a remedy—has further normalized its use, masking its deadly health risks. In 2017 alone, the country saw at least 16,947 deaths directly attributable to SLT.
From a fiscal perspective, the neglect is even more alarming. Bangladesh’s tobacco tax system heavily skewed towards cigarettes, while SLT generates only a negligible share of revenue. Cigarettes face a 67% ad valorem tax, 15% VAT, and a 1% health development surcharge, whereas SLT is taxed at 55% supplementary duty with 15% VAT—and remains significantly cheaper. This disparity stems from a flawed ad valorem system based on ex-factory prices, allowing manufacturers to undervalue products and keep prices artificially low. As a result, SLT remains highly affordable, encouraging continued consumption and even substitution from higher-taxed cigarettes.
Another major reason for SLT’s exclusion from budget priorities is its vast informal market. A large share of SLT production takes place in unregulated, small-scale settings that evade taxation. Weak licensing systems, absence of a comprehensive manufacturer database, and limited enforcement capacity further exacerbate the situation. Without proper visibility across the supply chain, integrating SLT into fiscal planning remains a challenge.
The SLT industry thrives within a shadow economy. Some companies operate using fake Business Identification Numbers (BINs) or non-existent addresses, while large volumes of sada pata are produced in domestic settings that elude regulatory inspections. Even among packaged products, only about 57% that list ingredients explicitly mention “tobacco.”
The National Board of Revenue (NBR) lacks a complete registry of SLT manufacturers and relies heavily on self-declaration—an approach frequently undermined by the industry. Institutional fragmentation further complicates the issue. Limited coordination between the NBR and the Ministry of Health prevents alignment between fiscal policy and public health goals, leaving SLT insufficiently addressed in both domains.
Ignoring SLT is no longer an option. Its widespread use, severe health burden, and minimal tax contribution make it a critical gap in Bangladesh’s tobacco control framework. The government must bring SLT to the forefront of budget discussions, reform the tax structure by introducing a specific tax based on retail price, increase prices, and bring informal production under effective regulation.
Myth vs. Fact
Moving forward, the government must shift from the current ad valorem system to a specific tax structure for SLT. The tax base should move from ex-factory to retail price to prevent undervaluation. SLT taxes should be increased at a higher rate than cigarettes to reduce price gaps and discourage substitution.
At the same time, the NBR should introduce a digital tracking and tracing system to monitor the supply chain, alongside mandatory licensing for all manufacturers and retailers. Bringing sada pata and loose tobacco into the tax net is essential to eliminate their “invisible” status.
Enforcement of the Smoking and Tobacco Products Usage Control Amendment Ordinance 2025—requiring 75% graphic health warnings—must also be prioritized, along with gender-sensitive public awareness campaigns to counter prevailing myths.
Bangladesh cannot afford to remain silent about the form of tobacco used by more than half of its users. To protect both public health and economic stability, smokeless tobacco must be brought out of the shadows and into the center of policy and budget priorities. A truly effective tobacco control strategy requires visibility, accountability, and decisive action—starting now.
Author: Research Associate, Bangladesh Network for Tobacco Tax Policy (BNTTP).
